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): March 9, 2018

 

HELIOS AND MATHESON ANALYTICS INC.

(Exact name of Registrant as specified in charter)

 

Delaware     0-22945     13-3169913
(State or other jurisdiction
of incorporation) 		  (Commission File Number)   (IRS Employer
Identification Number)

 

Empire State Building

350 5 th 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.

 

On March 14, 2018, Helios and Matheson Analytics Inc. (the “Company”) entered into a letter agreement (the “Lock-Up Agreement”) with Theodore Farnsworth, its Chief Executive Officer and Chairman of the Board of Directors, pursuant to which Mr. Farnsworth agreed that he would not sell or transfer any shares of the Company’s common stock (the “Common Stock”) held by him for a period of 24 months from the date of the Lock-Up Agreement, subject to certain permitted transfers as gifts, by will or intestate succession or to a family trust, provided that any such transfer is not a disposition for value and the transferee agrees to be bound by the Lock-Up Agreement. Mr. Farnsworth entered into the Lock-Up Agreement upon receipt from the Company of the Bonus (as defined below in Item 5.02 of this Current Report).

 

The above discussion does not purport to be a complete description of the Lock-Up Agreement and is qualified in its entirety by reference to the full text of the Lock-Up Agreement, which is attached as Exhibit 10.1 to this Current Report and incorporated herein by reference.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

From December 29, 2017 through the date of this Current Report, the Company has issued an aggregate of 704,668 unregistered shares (the “Consultant Shares”) of its Common Stock to various consultants for services rendered to the Company, all of which consultants are business entities not wholly-owned by a single individual. The Company relied on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”) for the issuance of the Consultant Shares, inasmuch as the consultants were accredited investors and neither the Company nor any person acting on its behalf offered or sold any of such securities by any form of general solicitation or general advertising.

 

As previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on August 15, 2017, the board of directors (the “Board”) of the Company, on August 10, 2017, approved the grant of 500,000 unregistered shares (the “Gadiyaram Shares”) of Common Stock to Muralikrishna Gadiyaram, a non-independent director and consultant of the Company, subject to (a) completion of the transactions contemplated by that certain Securities Purchase Agreement, dated August 15, 2017, as subsequently amended on October 6, 2017, by and between the Company and MoviePass Inc. (“MoviePass”), and (b) stockholder approval in accordance with Nasdaq Listing Rule 5635(c). As previously disclosed in a Current Report on Form 8-K filed with the SEC on October 31, 2017, the Company’s stockholders approved the grant of the Gadiyaram Shares at a special meeting of stockholders on October 27, 2017. In February 2018, upon entry into a grant letter documenting the lock-up and other applicable restrictions on the Gadiyaram Shares (which restrictions were set forth in the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on October 3, 2017), the Company issued the Gadiyaram Shares to Mr. Gadiyaram. The Company relied on Section 4(a)(2) of the Act for the issuance of the Gadiyaram Shares inasmuch as the recipient is an accredited investor and neither Helios nor any person acting on its behalf offered or sold any of such securities by any form of general solicitation or advertising.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On March 9, 2018, the Board, upon recommendation from the Compensation Committee of the Board, granted Theodore Farnsworth, the Company’s Chief Executive Officer and Chairman of the Board, a one-time cash bonus of $1,500,000 (the “Bonus”) in recognition of recent extraordinary efforts on behalf of the Company, including his role in the Company’s completed offerings of its securities for a total of $190,000,000 in gross proceeds since December 15, 2017 and his ongoing role in the acquisition of MoviePass and the integration of the MoviePass business with the Company.

 

Item 8.01 Other Events.

 

On February 28, 2018, the Company satisfied all of its obligations due under its Senior Secured Convertible Notes issued to an institutional investor on August 16, 2017 (the “August Notes”); therefore the August Notes have been extinguished. In addition, as of the date of this Current Report, the Company has no unrestricted principle outstanding under the Senior Convertible Notes issued to institutional investors on November 7, 2017 and January 23, 2018.

 

Accordingly, as of the date of this Current Report, the Company owes no debt principal under any debt instruments.

 

1

 

 

As of March 14, 2018, the Company had 43,299,563 shares of Common Stock issued and outstanding. This includes 9,100,000 shares that the Company issued pursuant to the exercise of the pre-funded Series B-1 Warrants issued in the Company’s underwritten public offering of Series A-1 Units and Series B-1 Units, as previously disclosed in a Current Report on Form 8-K filed with the SEC on February 13, 2018.

 

On March 15, 2018, the Company issued a press release announcing that it plans to spin off its wholly-owned subsidiary Zone Technologies, Inc. (“Zone”) as a dividend distribution to the Company’s securities holders, following which Zone would become an independent publicly traded company that the Company expects to also be listed on The Nasdaq Stock Market.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)         Exhibits .

 

Exhibit    
Number   Description
     
10.1   Lock-Up Agreement with Theodore Farnsworth, dated March 14, 2018
     
99.1   Press release issued by the Company, dated March 15, 2018

 

2

 

 

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: March 15, 2018

  

  HELIOS AND MATHESON ANALYTICS INC.
   
  By: /s/ Theodore Farnsworth
    Theodore Farnsworth,
Chief Executive Officer

 

3

 

 

EXHIBIT INDEX

 

Exhibit No.   Description
     
10.1   Lock-Up Agreement with Theodore Farnsworth, dated March 14, 2018.
     
99.1   Press release issued by the Company, dated March 15, 2018

 

 

4

 

 

Exhibit 10.1

 

 

 

March 14, 2018

 

Theodore Farnsworth

c/o Helios and Matheson Analytics Inc.

Empire State Building

350 5th Avenue

New York, New York 10118

 

Dear Ted:

 

This letter memorializes our agreement pursuant to which you covenant and agree that, during the period commencing on the date hereof (the “Effective Date”) and ending 24 months from the Effective Date, you shall not (A) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of our common stock, par value $0.01 per share, owned by you (the “Shares”), or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to the Shares or (B) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares, whether any such transaction is to be settled by delivery of the Shares, in cash or otherwise, (C) permit to exist any security interest, lien, claim, pledge, option, right of first refusal, agreement, limitation on your voting rights, charge or other encumbrance of any nature whatsoever with respect to any of the Shares, (D) engage in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Shares even if the Shares would be disposed of by someone other than you (including, without limitation, any short sale or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any of the Shares or with respect to any security that includes, relates to, or derives any significant part of its value from the Shares) or (E) directly or indirectly initiate, solicit or encourage any person to take actions which could reasonably be expected to lead to the occurrence of any of the foregoing. This provision is referred to in this letter as the “Lock-Up Provision”.

 

Notwithstanding the Lock-Up Provision, you may transfer your Shares (I) as a bona fide gift or gifts, (II) by will or intestate succession or (III) to a trust for the benefit of you and your immediate family, provided, in each case, that (a) such transfer will not involve a disposition for value and (b) the transferee agrees in writing with the Company to be bound by the terms of the Lock-Up Provision. For purposes of this letter agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.

 

 

 

 

If the terms of this letter agreement are agreeable to you, please countersign this letter at the space designated below.

 

  Very truly yours,
   
  HELIOS AND MATHESON ANALYTICS INC.
     
  By:   /s/ Stuart Benson  
  Name: Stuart Benson
  Title: Chief Financial Officer



I have read the above letter and agree to the terms.

 

/s/ Theodore Farnsworth

Theodore Farnsworth

 

 

2

 

 

Exhibit 99.1

 

  Helios and Matheson Analytics Inc. Announces Plans to Spin-Off Zone Technologies, Inc.

to Become a Separate Public Company

 

Spin-Off to be Effected through a Dividend Distribution of Zone Technologies Shares

 

NEW YORK (March 15, 2018) — Helios and Matheson Analytics Inc. (Nasdaq: HMNY) (“ HMNY ”), a provider of information technology services and solutions and owner of a controlling interest in MoviePass Inc. (“ MoviePass ”), today announced that its board of directors has approved a plan to spin-off its wholly-owned subsidiary, Zone Technologies, Inc. (“ Zone ”). Following the spin-off, Zone would become an independent publicly traded company that HMNY expects to also be listed on Nasdaq.

 

The spin-off is subject to numerous conditions, including, without limitation, the effectiveness of a Registration Statement on Form S-1 to be filed with the Securities and Exchange Commission and the approved listing of Zone’s common stock on Nasdaq. Pursuant to the spin-off, HMNY plans to distribute shares of Zone common stock as a dividend to persons who hold common stock of HMNY as of a record date to be determined. The board of directors of HMNY expects to set a record date to determine the stockholders entitled to receive shares of Zone in the spin-off for approximately 20 to 40 days before the effective date of the spin-off. Holders of any convertible notes and warrants of HMNY outstanding as of the applicable record date may be entitled to participate in the dividend of Zone shares in the spin-off in accordance with the terms of such notes and warrants.

 

The strategic goal of the spin-off is to create two public companies, each of which can focus on its own strengths and operational plans. In addition, after the spin-off, each of HMNY and Zone will be better equipped to pursue partnerships and other strategies that are more closely aligned with their respective business models.

 

“Having founded Zone, I am excited to implement this spin-off to maximize Zone’s true potential, by furthering the development of our RedZone Map™ product and expanding Zone’s business by entering into complementary technology sectors,” said Ted Farnsworth, HMNY’s Chief Executive Officer and Chairman. “I believe this spin-off will enable Zone to grow, both organically and by acquisition of other technologies,” Mr. Farnsworth concluded.

 

Upon the completion of the spin-off transaction, HMNY plans to continue focusing on its operations related to its controlling interest in MoviePass and expects HMNY’s management to be comprised of the same management team as prior to the spin-off. Following the spin-off, Zone plans to continue focusing on its RedZone Map™ product, as well as growth and acquisitions. Both HMNY and Zone expect to remain headquartered in New York City, HMNY’s current base of operations.

 

HMNY is in the process of evaluating the tax consequences, if any, of the proposed dividend distribution of Zone shares pursuant to the spin-off.

 

As reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on March 15, 2018, as of that date, HMNY owes no debt principal under any debt instruments.

 

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of any securities in any state or other jurisdiction in which such offer, solicitation or sale is not permitted.

 

About Zone Technologies, Inc.

 

Zone Technologies, Inc. is a state-of-the-art mapping and spatial analysis company with operations in the U.S. Its safety map app, RedZone Map™, enhances mobile GPS navigation by providing advanced proprietary technology to guide travelers to their destinations. The app incorporates a social media component allowing for real-time “It’s happening now” crime reporting coupled with real time data from over 1,400 local, state, national and global sources. RedZone Map ™ is currently available to iOS and Android users. More information is available on the RedZone Map ™ website.

 

 

 

 

About Helios and Matheson Analytics Inc.

 

Helios and Matheson Analytics Inc. (Nasdaq: HMNY) is a provider of information technology services and solutions, offering a range of technology platforms focusing on big data, artificial intelligence, business intelligence, social listening, and consumer-centric technology. HMNY owns a majority interest in MoviePass Inc., the nation's premier movie-theater subscription service. HMNY’s holdings include Zone Technologies, Inc., creator of RedZone Map™, a safety and navigation app for iOS and Android users, and a community-based ecosystem that features a socially empowered safety map app that enhances mobile GPS navigation using advanced proprietary technology. HMNY is headquartered in New York, NY and listed on the Nasdaq Capital Market under the symbol HMNY. For more information, visit us at www.hmny.com .

 

Forward Looking Statements

 

This release contains forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,” “predict,” “potential,” “continue,” and similar expressions are intended to identify such forward looking statements, which include but are not limited to statements regarding the effectiveness of a registration statement relating to the proposed spin-off, the listing of Zone’s common stock on Nasdaq, the benefits expected and other impacts anticipated of the spin-off and the tax consequences of the spin-off. These forward-looking statements are subject to a number of risks, including the inability to consummate the spin-off, failure of HMNY’s securities holders to receive favorable tax treatment, failure to achieve anticipated growth or accomplish financing objectives and the risk factors set forth from time to time in HMNY’s SEC filings, including but not limited to the risks that are described in the “Risk Factors” section of HMNY’s Annual Report on Form 10-K for the year ended December 31, 2016 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, each available on the SEC's web site at www.sec.gov. In addition to the risks described above and in HMNY’s other filings with the SEC, other unknown or unpredictable factors also could affect HMNY’s results. No forward-looking statements can be guaranteed, and actual results could differ significantly from those contemplated by the forward-looking statements. The information in this release is provided only as of the date of this release, and HMNY undertakes no obligation to update any forward-looking statements contained in this release on account of new information, future events, or otherwise, except as required by law.

 

CONTACT:

 

HMNY Contact:

The Pollack PR Marketing Group

Stephanie Goldman / Mark Havenner, 310-556-4443

sgoldman@ppmgcorp.com / mhavenner@ppmgcorp.com

or

MoviePass Contact:

LaunchSquad for MoviePass

Gavin Skillman, 212-564-3665

gavin@launchsquad.com