ITEM 1.01 ENTRY
INTO A MATERIAL DEFINITIVE AGREEMENT
Amendment and Exchange Agreement
As previously disclosed
in the Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on June 21, 2018, pursuant to a securities
purchase agreement (the “June Securities Purchase Agreement”) entered into by Helios and Matheson Analytics Inc. (the
“Company,” “we,” “our” and “us”) and the institutional investors party to the
June Securities Purchase Agreement (collectively, the “Buyers”), the Company agreed to sell and issue to the Buyers
20,500 shares of Series A Preferred Stock of the Company and Series B-2 senior secured convertible notes in the aggregate principal
amount of $164,000,000 (which included an approximate 15.0% original issue discount) (collectively, the “June Convertible
Notes”), for total consideration consisting of an aggregate cash payment to the Company of $20,500,000 and secured promissory
notes payable by the Buyers to the Company (collectively, the “June Investor Notes”) in an aggregate principal amount
of $139,400,000.
On October 4, 2018, the
Company entered into an Amendment and Exchange Agreement (the “Exchange Agreement”) with the holder of approximately
$68.75 principal amount of outstanding principal (the “Holder”) for the purpose of (i) netting the June Investor Note
issued by the Holder to the Company having an aggregate principal amount of approximately $68.0 million (the “June Investor
Note”) against the Holder’s June Convertible Note and (ii) following such netting transaction, exchanging the remaining
outstanding amount payable under the Holder’s June Convertible Note for a new non-convertible Senior Note issued by the
Company to the Holder (the “New Non-Convertible Note”) in an aggregate principal amount of $20.4 million, subject
to reduction as provided in the New Non-Convertible Note. As a result, the Holder’s June Convertible Note and the Holder’s
June Investor Note were each cancelled and became null and void.
Following the consummation of the transactions
contemplated by the Exchange Agreement, all of the June Convertible Notes have been cancelled.
Under the Exchange Agreement,
at any time on or prior to the later of (i) the date that the New Non-Convertible Note no longer remains outstanding and (ii)
the first anniversary of the date of the Exchange Agreement, the Company and its subsidiaries may not effect any Subsequent Placement
(as defined in the November Securities Purchase Agreement (as defined below)) unless the Company first offers to issue and sell
to, or exchange with, the Holder, at least 25% of the securities offered in the Subsequent Placement, subject to the terms and
conditions of the Exchange Agreement.
Amendment to November Securities Purchase Agreement
As previously disclosed in the Form 8-K filed
with the SEC on November 6, 2017, on November 6, 2017, the Company and institutional buyers (collectively, the “November
Buyers”) entered into a Securities Purchase Agreement (the “November Securities Purchase Agreement”) pursuant
to which the Company issued to the November Buyers: (i) senior bridge convertible notes, in the aggregate original principal amount
of $5 million, convertible into shares of common stock of the Company, in accordance with their terms and (ii) senior secured bridge
convertible notes, in the aggregate original principal amount of $95 million, convertible into shares of common stock of the Company,
in accordance with their terms (together, the “November Notes”).
Pursuant to the Exchange
Agreement, the November Securities Purchase Agreement was amended to reduce the number of shares of common stock of the Company
required to be reserved for issuance under the November Notes to 100% of the maximum number of shares of common stock of the Company
issuable upon conversion of the November Notes.
Amendment to January Securities Purchase Agreement
As previously disclosed in the Form 8-K filed
with the SEC on January 11, 2018, on January 11, 2018, the Company and an institutional buyer (the “January Buyer”)
entered into a Securities Purchase Agreement (the “January Securities Purchase Agreement”), pursuant to which the Company
issued to the January Buyer: (i) senior subordinated convertible notes, in the aggregate original principal amount of $25 million,
convertible into shares of common stock of the Company, in accordance with their terms and (ii) senior secured convertible notes,
in the aggregate original principal amount of $35 million, convertible into shares of common stock of the Company, in accordance
with their terms (together, the “January Notes”).
Pursuant to the Exchange
Agreement, the January Securities Purchase Agreement was amended to reduce the number of shares of common stock of the Company
required to be reserved for issuance under the January Notes to 125% of the maximum number of shares of common stock of the Company
issuable upon conversion of the January Notes.
New Non-Convertible Note
On October 4, 2018, the Company issued the
New Non-Convertible Note. The New Non-Convertible Note bears interest at a rate of 3% per annum, capitalized quarterly. The New
Non-Convertible Note is unsecured and not convertible into equity securities of the Company. Unless earlier redeemed, the New Non-Convertible
Note will mature on May 29, 2020.
As long as no Event of Default (as defined
in the New Non-Convertible Note) has occurred, the Company has the right to redeem the New Non-Convertible Note at any time on
or prior to the nine-month anniversary of the issuance of the New Non-Convertible Note for 50% of the principal being redeemed
and 100% of the accrued and unpaid interest and late charges, if any. After the nine-month anniversary of the issuance of the New
Non-Convertible Note, the Company has the right to redeem the New Non-Convertible Note at any time for 100% of the principal being
redeemed and 100% of the accrued and unpaid interest and late charges, if any. If the Company does not redeem the New Non-Convertible
Note within such nine-month period, the New Non-Convertible Note will amortize monthly in cash for, from June 28, 2019, four monthly
payments of $850,000 per month (plus accrued and unpaid interest, including any capitalized interest) and, commencing on October
30, 2019, eight monthly payments of $2,125,000 (plus accrued and unpaid interest, including any capitalized interest). Upon an
Event of Default, the Company must redeem the New Non-Convertible Note in cash at a price equal to, if the Event of Default occurs
on or prior to the nine-month anniversary of the issuance of the New Non-Convertible Note, and there is neither a Primary Covenant
Event of Default nor a Bankruptcy Default (each as defined in the New Non-Convertible Note), 50% of the principal being redeemed
and 100% of the accrued and unpaid interest and late charges, if any, in each case, multiplied by a redemption premium. If the
Event of Default occurs after the nine-month anniversary of the issuance of the New Non-Convertible Note, or there exists either
a Primary Covenant Event of Default or a Bankruptcy Default, then the Company must redeem the New Non-Convertible Note in cash
at a price equal to 100% of the principal being redeemed and 100% of the accrued and unpaid interest and late charges, if any,
in each case, multiplied by a redemption premium.
If the Holder participates
in a subsequent offering by the Company or prepays certain promissory notes issued by the Holder to the Company on January 23,
2018 and November 6, 2017, then 14.5% of the cash proceeds paid (or payable) by the Holder in such applicable transaction will
be used to pay down the New Non-Convertible Note on a dollar-for-dollar basis. Each such payment amount will reduce the scheduled
amortization payments on a reverse basis (i.e. last amortization reduced first).