UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 30, 2019
HELIOS AND MATHESON ANALYTICS INC.
(Exact name of Registrant as specified in charter)
| Delaware | 0-22945 | 13-3169913 | ||
| (State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
| of incorporation) | Identification Number) |
Empire State Building
350 5th Avenue
New York, New York 10118
(Address of principal executive offices)
Registrant’s telephone number, including area code: (212) 979-8228
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2 below).
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☒ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13(e)-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01. | Entry into a Material Definitive Agreement. |
Exchange Agreements and Amendment of Stock Purchase Agreements
On April 30, 2019, Helios and Matheson Analytics Inc. (the “Company” or “us” or “we”) entered into separate Exchange Agreements (the “Exchange Agreements”) with the holders of outstanding Series F-2 Preferred Stock Purchase Warrants (the “Warrants”) to purchase 60,240 shares of the Company’s Series B Preferred Stock, par value $0.01 per share, (the “Preferred Stock”), which are convertible into 1,004,020,080 shares of the Company’s common stock, for the purpose of exchanging such Warrants for 12% Debentures Due November 1, 2020 (the “Debentures”) in the aggregate principal amount of $2,100,000. The Debentures are described in detail under “Debentures” below. As a result, the Warrants have been cancelled.
Additionally, the Exchange Agreements amended the Securities Purchase Agreements entered into by the Company on March 25, 2019 with the holders of the outstanding Warrants and described in the Form 8-K (the “March 2019 Form 8-K”) filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2019 (the “Purchase Agreements”). As a result, the Purchase Agreements have been amended to remove the requirement that the Company obtain stockholder approval of an amendment of its certificate of incorporation to effect a reverse stock split of the Company’s common stock (the “Reverse Split”).
Debentures
On April 30, 2019, the Company issued the Debentures in an aggregate principal amount of $2,100,000 in exchange for the Warrants. Commencing on July 1, 2019, the Debentures will bear interest at a rate of 12% per annum, payable on November 1, 2020. The Debentures are unsecured. If stockholder approval of the Reverse Split is obtained, the Company may, at its option, redeem the Debentures in cash in an amount equal to the Optional Redemption Amount, or at the Company’s option, pursuant to Section 3(a)(9) of the Securities Act, through the exchange of Debentures for newly issued Warrants exercisable into such number of shares of Preferred Stock equal to the Optional Redemption Amount divided by $34.8606. The Optional Redemption Amount is equal to 100% of the principle amount of the Debentures, plus accrued but unpaid interest, if any, plus liquidated damages, if any. Unless earlier redeemed, the Debentures will mature on November 1, 2020.
Events constituting events of default under the Debentures include (i) any default in the payment of the principal amount of any Debenture or other amount owing to a holder any Debenture, (ii) the Company’s failure to observe or perform in any material respect any other covenant or agreement contained in the Debentures or in any Transaction Document (as defined in the Purchase Agreement), which is not cured within certain cure periods, (iii) any representation or warranty made in the Debenture or the Exchange Agreement, or other statements or reports pursuant thereto shall be untrue or incorrect in any material respect, (iv) the Company or any Significant Subsidiary being subject to a Bankruptcy Event (each, as defined in the Debenture), (v) the Company’s or any of its subsidiaries’ default on any of its obligations under any financial instrument or accommodations that (a) involves an obligation greater than $500,000, and (b) results in the related indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; (vi) the Company’s being a party to any Change of Control Transaction (as defined in the Debenture) or agreeing to sell or dispose of all or in excess of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction) other than the transfer by the Company to a wholly-owned subsidiary of the Company (“Spinco”) of all of the Company’s ownership interests in MoviePass Inc., MoviePass Films, LLC, MoviePass Ventures LLC and Moviefone™ related assets and the subsequent distribution of shares of Spinco to the stockholders of the Company and holders of convertible notes, warrants or other outstanding equity or equity-linked instruments of the Company to the extent required by such instruments; or (vii) any monetary judgment, writ or similar final process entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $500,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days.
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The foregoing descriptions of the Exchange Agreements and the Debentures are not complete and are qualified in their entirety by references to the full text of such documents, forms of which are filed as Exhibits 10.1 and 4.1, respectively, to this Current Report and are incorporated by reference herein. The Warrants are described in the March 2019 Form 8-K, which description and form of Warrant are incorporated by reference herein.
All statements in this report that are not historical facts should be considered “Forward Looking Statements” within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Some of the forward-looking statements can be identified by the use of words such as “believe,” “expect,” “may,” “will,” “should,” “seek,” “approximately,” “intend,” “plan,” “estimate,” “project,” “continue” or “anticipates” or similar expressions or words, or the negatives of those expressions or words. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or any other reason, after the date of this report.
Additional Information
The Company plans to file with the SEC and mail to its stockholders a definitive proxy statement in connection with the special meeting to approve the Reverse Split. THE PROXY STATEMENT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE REVERSE SPLIT. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE. Based on its communications with the New York Stock Exchange, the Company believes that, in light of the Exchange Agreements, the New York Stock Exchange will deem the proposals in the proxy statement to be “discretionary” items, which would enable certain brokers to exercise their discretion to vote on the proposals in the absence of direction from the applicable beneficial owners of the shares being voted. Investors and security holders may obtain free copies of the Company’s definitive proxy statement, any amendments to the proxy statement and its other filings with the SEC electronically by accessing the SEC’s home page at http://www.sec.gov. Copies can also be obtained, free of charge, upon written request to Helios and Matheson Analytics Inc., Empire State Building, 350 Fifth Avenue, Suite 7520, New York, New York 10118, Attention: Robert Damon, Secretary.
| Item 2.03 | Creation of A Direct Financial Obligation or An Obligation under An Off-Balance Sheet Transaction. |
To the extent required, the information included in Item 1.01 of this Current Report is hereby incorporated by reference into this Item 2.03.
| Item 3.02. | Unregistered Sales of Equity Securities. |
The
information included in Item 1.01 of this Current Report is hereby incorporated by reference into this Item 3.02. The Company
relied on Section 3(a)(9) of the Securities Act of 1933, as amended, for the issuance of the
Debentures.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. | Description | |
| 4.1 | Form of Debenture | |
| 10.1 | Form of Exchange Agreement, dated as of April 30, 2019, among the Company and certain warrant holders |
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SIGNATURE
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 hereunto duly authorized.
Dated: April 30, 2019
| HELIOS AND MATHESON ANALYTICS INC. | ||
| By: | /s/ Theodore Farnsworth | |
Name: Theodore Farnsworth Title: Chief Executive Officer | ||
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Exhibit 4.1
Original Issue Date: April __, 2019 (exchanged for Series F-2 Warrants)
$700,000
12% DEBENTURE
Due November 1, 2020
THIS 12% DEBENTURE is one of a series of duly authorized and validly issued 12% Debentures of Helios and Matheson Analytics Inc., a Delaware corporation (the “Company”), having its principal place of business at Empire State Building 350 5th Ave., Suite 7520 New York, NY 10118, designated as its 12% Debenture due on November 1, 2020 (this debenture, the “Debenture” and, collectively with the other debentures of such series, the “Debentures”).
FOR VALUE RECEIVED, the Company promises to pay to ________________________ or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of $700,000, plus interest and other amounts owing hereunder, on November 1, 2020 (the “Maturity Date”) or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder. This Debenture is subject to the following additional provisions:
Section 1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Exchange Agreement and (b) the following terms shall have the following meanings:
“Bankruptcy Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due, (h) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company, (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction, or (d) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (c) above. Notwithstanding the foregoing, a “Change of Control Transaction”: shall not include any of the following transactions: (i) any merger of the Company or any of its, direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of the shares of Common Stock in which holders of securities with the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of securities with the voting power of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification, (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries, or (iv) any acquisition by the Company (whether by merger, stock purchase or otherwise) of any Person (each, a “Permitted Acquisition”) in which (A) holders of securities with a majority of the Company’s voting power immediately prior to such Permitted Acquisition continue after such Permitted Acquisition to hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of securities with a majority the voting power of the surviving entity (or entities with the authority or voting power to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such Permitted Acquisition and (B) the members of such board of directors immediately following such Permitted Acquisition (including any subsequent changes to such board of directors required to be made pursuant to the terms of such Permitted Acquisition) include at least a majority of the board of directors of the Company immediately prior to such Permitted Acquisition.
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“Debenture Register” shall have the meaning set forth in Section 2(c).
“Event of Default” shall have the meaning set forth in Section 5(a).
“Exchange Agreement” means the Exchange Agreement, dated as of April __, 2019 between the Company and the original Holder of the Debenture, as amended, modified or supplemented from time to time in accordance with its terms.
“Late Fees” shall have the meaning set forth in Section 2(d).
“Mandatory Default Amount” means 120% of the outstanding principal amount of this Debenture, plus all other amounts, costs, expenses and liquidated damages due in respect of this Debenture.
“Optional Redemption Amount” means the sum of (a) 100% of the then outstanding principal amount of the Debenture, (b) accrued but unpaid interest under the Debenture, if any, and (c) all liquidated damages and other amounts due in respect of the Debenture.
“New York Courts” shall have the meaning set forth in Section 6(d).
“Original Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture and regardless of the number of instruments which may be issued to evidence such Debentures.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Stockholder Approval” means such approval as may be required to increase the authorized share capital of the Company or to effect a reverse stock split of the Company’s Common Stock to allow for the reservation in full of all of the Underlying Shares issuable pursuant to the Transaction Documents (ignoring for such purposes any exercise under the Warrants or conversion limitations under the Certificate of Designations).
Section 2. Interest.
a) Payment of Interest in Cash. Commencing on July 1, 2019, interest on the then outstanding principal amount of this Debenture shall begin to accrue interest at the rate of 12% per annum, payable on the Maturity Date in cash.
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b) Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on July 1, 2019, until payment in full of the outstanding principal, together with all accrued and unpaid interest and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Debenture is registered on the records of the Company regarding registration and transfers of this Debenture (the “Debenture Register”).
c) Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.
d) Prepayment. Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the principal amount of this Debenture without the prior written consent of the Holder.
Section 4. Optional Redemption
| a) | Redemption. Following the date that Stockholder Approval is obtained and deemed effective (the “Optional Redemption Event”), the Company may, at its option, redeem this Debenture and all other then outstanding Debentures in cash in an amount equal to the Optional Redemption Amount, or at the Company’s option, pursuant to Section 3(a)(9) of the Securities Act, through the exchange of this Debenture for a Series F-2 Warrant exercisable into such number of shares of Preferred Stock (as defined in the Purchase Agreement) equal to the Optional Redemption Amount divided by $34.8606 (the “Optional Redemption”). In the event that the Company elects to exchange this Debenture for a Series F-2 Warrant, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Series F-2 Warrant shall take on the registered characteristics of this Debenture. |
| b) | Optional Redemption Notices. With respect to the Optional Redemption Event, the Company shall deliver a written notice by confirmed facsimile, email and overnight courier (with next day delivery specified) to all, but not less than all, of the holders of Debentures (the “Optional Redemption Notice” and the date such notice is delivered to all such holders is referred to as the “Optional Redemption Notice Date”) (a) stating the date on which the applicable Optional Redemption shall occur (the “Optional Redemption Date”), which date shall be two (2) Trading Days immediately following such Optional Redemption Event, (b) stating whether the Company will redeem this Debenture in cash or exchange the Debenture for a Series F-2 Warrant and (c) contain a certification from the Chief Executive Officer of the Company that the Company has simultaneously taken the same action with respect to all of the Debentures (including that all Debentures are being redeemed or exchanged in the same manner). |
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| c) | Payment of Optional Redemption. The Company shall deliver the applicable Optional Redemption to the Holder in cash by wire transfer of immediately available funds, if the Company elects to redeem the Debentures in cash, or through the delivery of a Series F-2 Warrant to the Holder to the address provided to the Company by the Holder on the Optional Redemption Date. |
Section 5. Events of Default.
a) “Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):
i. any default in the payment of the principal amount of any Debenture or other amounts owing to a Holder on any Debenture, as and when the same shall become due and payable;
ii. the Company shall fail to observe or perform in any material respect any other covenant or agreement contained in the Debentures or in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Business Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Business Days after the Company has become or should have become aware of such failure;
iii. any representation or warranty made in this Debenture or the Exchange Agreement, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder pursuant hereto or the Exchange Agreement shall be untrue or incorrect in any material respect as of the date when made or deemed made;
iv. the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;
v. the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, or any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement (collectively, “Indebtedness”) that, in each case, (a) involves an obligation greater than $500,000, whether such Indebtedness now exists or shall hereafter be created, and (b) results in such Indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;
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vi. the Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction) other than the transfer by the Company to a wholly-owned subsidiary of the Company (“Spinco”) of all of the Company’s ownership interests in MoviePass Inc., MoviePass Films, LLC, MoviePass Ventures LLC and Moviefone™ related assets and the subsequent distribution of shares of Spinco to the stockholders of the Company and holders of convertible notes, warrants or other outstanding equity or equity-linked instruments of the Company to the extent required by such instruments; or
vii. any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $500,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days.
b) Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Commencing 5 days after the occurrence of any Event of Default, the interest rate on this Debenture shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 5(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
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Section 6. Miscellaneous.
a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 6(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, email address or address of the Holder appearing on the books of the Company, or if no such facsimile number or email attachment or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Exchange Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.
b) Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages, on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation of the Company. This Debenture ranks pari passu with all other Debentures now or hereafter issued under the terms set forth herein.
c) Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory to the Company.
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d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Debenture or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Debenture, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
e) Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Company or the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture on any other occasion. Any waiver by the Company or the Holder must be in writing.
f) Severability. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Debenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.
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g) Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Debenture shall be cumulative and in addition to all other remedies available under this Debenture and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Debenture. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Debenture.
h) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
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i) Headings. The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall not be deemed to limit or affect any of the provisions hereof.
Section 7. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Debenture, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries, the Company shall within two (2) Business Days after such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.
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(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized officer as of the date first above indicated.
| HELIOS AND MATHESON ANALYTICS INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| e-mail for delivery of Notices: rdamon@hmny.com | ||
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Exhibit 10.1
SECURITIES EXCHANGE AGREEMENT
THIS SECURITIES EXCHANGE AGREEMENT (the “Agreement”), dated as of April 30, 2019, is entered into by and between Helios and Matheson Analytics Inc., a Delaware corporation (the “Company”), and the party identified as “Holder” on the signature page hereto (the “Holder”).
WHEREAS, pursuant to that certain Securities Purchase Agreement, dated as of March 25, 2019, between the Company and the Holder and the other purchasers signatory thereto (the “Purchase Agreement”) and the Registration Statement (as defined in the Purchase Agreement), the Holder purchased Series F-2 Warrants (the “Warrants”) to purchase up to 20,080 shares of Preferred Stock of the Company, having an exercise price of $100 per share and an expiration date of five (5) years following the initial exercise date as set forth therein; and
WHEREAS, pursuant to the terms herein, the Company and the Holder have agreed to exchange the Warrants for a debenture of the Company to be issued to the Holder in the form of Exhibit A hereto (the “Debenture”), having an initial principal amount of $700,000.00.
WHEREAS, defined terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and if not defined therein, then in the Debenture.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of the Company and the Holder hereby agrees as follows:
1. Exchange. On the Closing Date (as defined below), subject to the terms and conditions of this Agreement, the Holder shall, and the Company shall, pursuant to Section 3(a)(9) and/or Section 4(a)(2) of the Securities Act, exchange the Warrants for the Debenture. Subject to the conditions set forth herein, the exchange of the Warrants for the Debenture shall take place on April 30, 2019, or at such other time and place as the Company and the Holder mutually agree (the “Closing” and the “Closing Date”). At the Closing, the following transactions shall occur (such transactions, an “Exchange”):
1.1 On the Closing Date, in exchange for the Warrants, the Company shall deliver the Debenture to the Holder or its designee in accordance with the Holder’s delivery instructions set forth on the Holder’s signature page hereto. Upon delivery of the Debenture to the Holder in accordance with this Section 1.1, all of the Holder’s rights under the Warrants shall be extinguished. The Holder shall tender to the Company the Warrants within three Trading Days of the Closing Date.
1.2 On the Closing Date, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Debenture, and the Warrants shall be deemed for all corporate purposes to have been cancelled, irrespective of the date such Debenture is delivered to the Holder in accordance herewith.
2. Closing Conditions.
2.1 Conditions to Holder’s Obligations. The obligation of the Holder to consummate the Exchange is subject to the fulfillment, to the Holder’s reasonable satisfaction, prior to or at the Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects on the date hereof and on and as of the Closing Date as if made on and as of such date.
(b) Issuance of Securities. At the Closing, the Company shall issue the Debenture, registered in the name of the Holder.
(c) No Actions. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or authority or legislative body to enjoin, restrain, prohibit or obtain substantial damages in respect of, this Agreement or the consummation of the transactions contemplated by this Agreement.
(d) Proceedings and Documents. All proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be satisfactory in substance and form to the Holder, and the Holder shall have received all such counterpart originals or certified or other copies of such documents as they may reasonably request.
(e) Consents. The Company shall have obtained all required consents and approvals required to effect the transaction hereunder.
2.2 Conditions to the Company’s Obligations. The obligation of the Company to consummate the Exchange is subject to the fulfillment, to the Company’s reasonable satisfaction, prior to or at the Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and warranties of the Holder contained in this Agreement shall be true and correct in all material respects on the date hereof and on and as of the Closing Date as if made on and as of such date.
(b) No Actions. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or authority or legislative body to enjoin, restrain, prohibit, or obtain substantial damages in respect of, this Agreement or the consummation of the transactions contemplated by this Agreement.
(c) Proceedings and Documents. All proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be satisfactory in substance and form to the Company and the Company shall have received all such counterpart originals or certified or other copies of such documents as the Company may reasonably request.
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3. Representations and Warranties of the Company. The Company hereby represents and warrants to Holder that:
3.1 Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.
3.2 Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Company hereunder, and the authorization (or reservation for issuance of), the Exchange, and the issuance of the Debenture have been taken on or prior to the date hereof.
3.3 Valid Issuance of the Securities. The Debenture, when issued and delivered in accordance with the terms of this Agreement, for the consideration expressed herein, will be duly and validly issued, fully paid and non-assessable.
3.4 Offering. The offer and issuance of the Debenture as contemplated by this Agreement are exempt from the registration requirements of the Securities Act. Neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemptions.
3.5 Compliance with Laws. To the Company’s knowledge, the Company has not violated any law or any governmental regulation or requirement which violation has had or would reasonably be expected to have a material adverse effect on its business and the Company has not received written notice of any such violation.
3.6 Consents; Waivers. No consent, waiver, approval or authority of any nature, or other formal action, by any Person, not already obtained, is required in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions provided for herein and therein.
3.7 Absence of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company, the Securities or any of the Company’s officers or directors in their capacities as such that would reasonably be expected to have a Material Adverse Effect on the Company or its Subsidiaries and that would be required to be disclosed under Item 103 of Regulation S-K under the Securities Act and which has not been publicly announced, except as disclosed in the SEC Reports or in Schedule 3.1(j) of the Purchase Agreement.
3.8 Validity; Enforcement; No Conflicts. This Agreement and each Transaction Document to which the Company is a party have been duly and validly authorized, executed and delivered on behalf of the Company and shall constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. The execution, delivery and performance by the Company of this Agreement and each Transaction Document to which the Company is a party and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Company or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party or by which it is bound, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities or “blue sky” laws) applicable to the Company, except in the case of clause (ii) above, for such conflicts, defaults or rights which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Company to perform its obligations hereunder.
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3.9 Disclosure. The Company confirms that neither the Company nor any other Person acting on its behalf has provided the Holder or its agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information. The Company understands and confirms that the Holder will rely on the foregoing representations in effecting transactions in the securities of the Company.
3.10 No Commission Paid. Neither the Company nor any of its Affiliates nor any person acting on behalf of or for the benefit of any of the foregoing, has paid or given, or agreed to pay or give, directly or indirectly, any commission or other remuneration (within the meaning of Section 3(a)(9) of the Securities Act and the rules and regulations of the Commission promulgated thereunder) for soliciting the Exchange.
3.11 Characteristics. The Company acknowledges and agrees that, in accordance with Section 3(a)(9) of the Securities Act, the Debenture issued in exchange for the registered Warrants take on the registered characteristics of the Warrants. The Company agrees not to take any position contrary to this Section 3.12.
4. Representations and Warranties of the Holder. The Holder hereby represents, warrants and covenants that:
4.1 Authorization. The Holder has full power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby and has taken all action necessary to authorize the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby.
4.2 Ownership of the Warrants. The Holder owns and holds, beneficially and of record, the entire right, title, and interest in and to the Warrants hereunder free and clear of all rights and Liens. The Holder has full power and authority to transfer and dispose of the Warrants to the Company free and clear of any right or Lien.
4.3 Holder Status. The Holder is an “accredited investor” as such term is defined in Rule 501(a) under the Securities Act.
4.4 Understandings or Arrangements. The Holder is acquiring the Debentures hereunder as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Debentures. The Holder is acquiring the Debentures hereunder in the ordinary course of its business.
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5. Additional Covenants.
5.1 Disclosure. The Company shall, on or before 9:30 a.m., New York City time, on the first business day after the date of this Agreement, file with the Securities and Exchange Commission a Current Report on Form 8-K (the “8-K Filing”) disclosing all material terms of the transactions contemplated hereby. From and after the filing of the 8-K Filing, the Holder shall not be in possession of any material, nonpublic information received from the Company or any of its respective officers, directors, employees or agents that is not disclosed in the 8-K Filing. The Company shall not, and shall cause its officers, directors, employees and agents, not to, provide the Holder with any material, nonpublic information regarding the Company from and after the filing of the 8-K Filing without the express written consent of the Holder. The Company shall not disclose the name of the Holder in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and the Holder or any of its affiliates, on the other hand, shall terminate.
5.2 Most Favored Nations. The Company covenants and agrees that it has not entered into an exchange agreement with any other holder of Warrants (each, an “Other Holder”) for any material amendments, modifications or exchanges to the terms of such Warrants (or settlement or exchange of such Warrants for other material consideration) (each a “More Favorable Agreement”), that is more favorable to such Other Holder than those of the Holder pursuant to this Agreement. If the Company enters into a More Favorable Agreement with terms that are materially different from this Agreement (“material” shall be in the reasonable determination of the Holder), then (i) the Company shall provide written notice thereof to the Holder promptly following the occurrence thereof and (ii) the terms and conditions of this Agreement that shall be, without any further action by the Holder or the Company, automatically and retroactively to the date hereof, amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of such more favorable material terms and/or conditions (as the case may be) set forth in such More Favorable Agreement, provided that upon written notice to the Company within five business days of such Company’s written notice, the Holder may elect not to accept the benefit of any such amended or modified material term or condition, in which event the material term or condition contained in this Agreement shall continue to apply to the Holder as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder. The provisions of this paragraph shall apply similarly and equally to each More Favorable Agreement and shall be effective whether or not the Holder holds the Debentures at such time. The Company will notify the Holder any time it enters into any agreement with any Other Holder relating to the Warrants and, at the request of the Holder, provide the Holder with such agreement for its review.
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5.3 Amendment of Purchase Agreement; Waivers.
(a) Amendments. The Holder and the Company hereby agree that the Purchase Agreement shall be amended to remove the requirement that the Company obtain the Shareholder Approval, including without limitation, as follows:
(i) The definition of Shareholder Approval in Section 1.1 of the Purchase Agreement is hereby deleted.
(ii) Section 3.1(e) of the Purchase Agreement is hereby amended and restated in its entirety to read as follows:
“(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.3 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement and (iii) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).”
(iii) Section 4.11 of the Purchase Agreement is hereby deleted.
(iv) Section 4.15 of the Purchase Agreement is hereby deleted in its entirety.
(b) Effect; Waiver. Upon execution hereof and consent to the foregoing amendment by all other Purchasers (as defined in the Purchase Agreement), each reference to the Purchase Agreement shall be to the Purchase Agreement as amended hereby. Regardless and independent of such amendments going into effect, the Holder, in its capacity as Purchaser under the Purchase Agreement, hereby waives the requirement that the Company obtain the Shareholder Approval, consistent with the amendments set forth in Section 5.3(a) hereof.
5.4 Definitions. The Debenture shall for all such purposes be deemed “Securities” as used under the Purchase Agreement, to the extent applicable, as if the Debenture were issued pursuant to such agreement.
5.5 Blue Sky. The Company shall make all filings and reports relating to the Exchange required under applicable securities or “Blue Sky” laws of the states of the United States following the date hereof, if any.
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6. Miscellaneous.
6.1 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
6.2 Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
6.3 Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered pursuant to the terms of the Purchase Agreement.
6.4 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holder.
6.5 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
6.6 Entire Agreement. This Agreement represents the entire agreement and understanding between the parties concerning the Exchange and the other matters described herein and therein and supersede and replaces any and all prior agreements and understandings solely with respect to the subject matter hereof and thereof.
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6.7 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
6.8 Survival. The representations, warranties and covenants of the Company and the Holder contained herein shall survive the Closing and delivery of the Debenture.
6.9 Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
6.10 Independent Obligation. The obligations of the Holder under this Agreement are several and not joint with the obligations of any Other Holder under any other agreement, and the Holder shall not be responsible in any way for the performance of the obligations of any Other Holder under any such other agreement. Nothing contained herein, and no action taken by the Holder pursuant hereto, shall be deemed to constitute the Holder and Other Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holder and the Other Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement and the Company acknowledges that the Holder and the Other Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any other agreement. The Company and the Holder confirm that the Holder has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. The Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any Other Holder to be joined as an additional party in any proceeding for such purpose.
[signatures on following pages]
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IN WITNESS WHEREOF, this Securities Exchange Agreement is executed as of the date first set forth above.
| HELIOS AND MATHESON ANALYTICS INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
[signature page of Holder to follow]
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SIGNATURE PAGE OF HOLDER TO
SECURITIES EXCHANGE AGREEMENT
BETWEEN HELIOS AND MATHESON ANALYTICS INC. AND
THE HOLDER THEREUNDER
Name of Holder: ___________________________________
By: ______________________________________________
Name: ____________________________________________
Title: _____________________________________________
Delivery Instructions: