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): January 20, 2017
HELIOS AND MATHESON ANALYTICS INC.
(Exact name of Registrant as specified in charter)
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Delaware
(State or other jurisdiction of incorporation)
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0-22945
(Commission File Number)
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13-3169913
(IRS Employer Identification Number)
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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).
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13(e)-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
The information included at Item 3.02 below disclosing the Executive Plan as it relates to Mr. Gadiyaram is incorporated by reference in its entirety into this Item 1.01.
Item 3.02 Unregistered Sales of Equity Securities.
On January 20, 2017 (the “Approval Date”), the Board of Directors (the “Board”) of Helios and Matheson Analytics Inc. (the “Company”) approved individual employee benefit plans (the “Executive Plans”) for Theodore Farnsworth, Pat Krishnan and Muralikrishna Gadiyaram. Pursuant to the Executive Plans, which are subject to approval by the Company’s shareholders, the Company will issue 250,000 unregistered shares of the Company’s common stock to each of the above-named individuals as a bonus for exceptional services provided in connection with the Company’s merger transaction with Zone Technologies, Inc. (“Zone”). The Executive Plans each include a provision that prevents the sale or transfer of the shares, subject to exceptions for the transfer by gift, by will or intestate succession, or to a trust for the benefit of the individual or his family, for a period of 24 months from the date that shareholder approval is obtained. Subject to the requirements of the Company’s insider trading policy, the shares may also be sold or transferred in connection with the full or partial payment of taxes or tax withholding obligations required to be paid or satisfied upon the individual’s receipt of the shares. The Executive Plans also include a market standoff provision which prevents the recipient from selling or transferring the shares for a period not to exceed 180 days from the consummation of a registered offering if so requested by the underwriter or placement agent.
On the Approval Date the Board also approved individual employee benefit plans (the “Consultant Plans”) for two consultants. Pursuant to the Consultant Plans, each of the Consultants will receive 200,000 unregistered shares of the Company’s common stock as a bonus for exceptional services provided in connection with the Company’s merger transaction with Zone.
Before issuing the shares of common stock pursuant to the Executive Plans and the Consultant Plans, the Company will be required to submit to, and have approved by, The NASDAQ Stock Market, LLC a listing of additional shares notification.
The Board relied on Section 4(a)(2) of the Securities Act of 1933, as amended, to grant the common stock inasmuch as all of the recipients are accredited investors.
The above description does not purport to be a complete description of the Executive Plans or the Consultant Plans and is qualified in its entirety by reference to the full text of such documents, the forms of which are attached as exhibits to this Current Report and are incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On the Approval Date, Pat Krishnan resigned as the Company’s Chief Executive Officer and was appointed by the Board as the Company’s Chief Innovation Officer, for the purpose of managing the process of innovation and technological change in the Company as well as originating new ideas and recognizing innovative ideas generated by others at the Company. On the Approval Date, Theodore Farnsworth was appointed by the Board as the Company’s Chief Executive Officer.
Mr. Farnsworth, age 54, has served as Chairman of the Board of Directors of the Company since November 9, 2016 and Chief Executive Officer of Zone since Zone’s inception. An expert in strategic development, marketing and consumer relations, Mr. Farnsworth has utilized these assets and skills building companies throughout his 30-year career. He has owned and operated numerous companies with proprietary products with recognized brand names that he actively helped to develop. Currently, he is Chairman and Founder of the Highlander Companies, Millennial Hotel Group and iCrowd Hotels.
Mr. Farnsworth is a private investor in numerous ventures and an equity partner in a company owning a portfolio of office buildings in markets across the U.S., the majority of which are leased to the Federal government’s Government Services Administration.
His entrepreneurial expertise has been sought for many speaking engagements and feature articles in numerous publications, including Forbes, Fortune, Investor’s Business Daily, The Wall Street Journal and The New York Times. Over thirteen years ago, Mr. Farnsworth founded the charitable Far West Haiti Mission, providing education, housing and work incentives, and additionally founded a school for the blind at the Mission.
There are no family relationships between Mr. Farnsworth and the Company’s other directors or executive officers.
Prior to the completion of the merger with Zone, Mr. Farnsworth was the controlling stockholder of Zone. On September 7, 2016 and October 25, 2016, Zone executed promissory notes in the amounts of $750,000 and $383,305, respectively, in favor of the Company’s wholly owned subsidiary, HMNY Zone Loan LLC.
The information included at Item 3.02 above disclosing the Executive Plans as they relate to Mr. Farnsworth and Mr. Krishnan is incorporated by reference in its entirety into this Item 5.02.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On January 22, 2017, Helios and Matheson Information Technologies Ltd., Helios and Matheson, Inc. and Theodore Farnsworth, which collectively own 3,483,040 shares, or approximately 71.5%, of the Company’s common stock approved the Executive Plans and the Consultant Plans and the issuance of the Company’s common stock to the recipients thereunder.
Item 7.01 Regulation FD Disclosure.
On January 23, 2017 the Company issued a press release disclosing Mr. Farnsworth’s appointment as Chief Executive Officer and Mr. Krishnan’s appointment as Chief Innovation Officer. The press release is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein, and the description of the press release is qualified in its entirety by reference to such exhibit.
The press release is furnished under this Item 7.01 and shall not be deemed filed with the U.S. Securities and Exchange commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. The information contained in the press release shall not be incorporated by reference into any filing we make regardless of general incorporation language in the filing, unless expressly incorporated by reference in such filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.1 Form of Executive Plan
Exhibit 10.2 Form of Consultant Plan
Exhibit 99.1 Press release issued January 23, 2017
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: January 23, 2017
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HELIOS AND MATHESON ANALYTICS INC.
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By:
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/s/
Stuart Benson
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Stuart Benson, Chief Financial Officer
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Exhibit Index
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Exhibit No.
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Description
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10.1
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Form of Executive Plan
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10.2
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Form of Consultant Plan
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99.1
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Press release issued January 23, 2017
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Exhibit 10.1
January 20, 2017
[Name of Recipient]
[Address]
Dear [_______]
2016 was an exciting and a challenging year for Helios and Matheson Analytics Inc. (the “Company”). With your assistance, we were able to complete the merger of Zone Technologies, Inc. and during 2017, again with your assistance and vision, we expect the Company to develop Zone’s technology to its full potential. This letter, referred to herein as the “Plan”, constitutes an “employee benefit plan”, as that term is defined in Rule 405 promulgated under the Securities Act of 1933, as amended.
In appreciation for your efforts, the Company will issue to you 250,000 shares of its unregistered common stock, referred to in this Plan as the “Shares”, subject to the following:
(i) In accordance with Nasdaq Listing Rule 5635(c), this grant is subject to shareholder approval within the meaning of Nasdaq Listing Rule 5635(e)(4) (“Shareholder Approval”). This grant will not become effective and the Shares shall not be issued until such date when Shareholder Approval is obtained pursuant to the Delaware General Corporation Law and Regulation 14A or 14C under the Securities Exchange Act of 1934, as amended.
(ii) The Company will submit a listing of additional shares form to The Nasdaq Stock Market LLC (“Nasdaq”) covering the Shares. The Shares will not be issued unless and until Nasdaq approves the listing of additional shares form. If the listing of additional shares form is not approved by Nasdaq, this grant will be null and void and the Shares shall not be issued.
(iii) (a) By signing this Plan and subject to the exceptions discussed below, you covenant and agree that, during the period commencing on the date that Shareholder Approval is obtained and ending 24 months from that 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, 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 Plan as the “Lock-Up Provision”.
(b) 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 Plan, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.
(c) In addition, the Lock-Up Provision will not apply to any transfers of your Shares to the Company or any deemed disposition or deemed sale with respect to the Shares in connection with the full or partial payment of taxes or tax withholding obligations required to be paid or satisfied upon your receipt of the Shares, in accordance with section (iv) below.
(iv) The Company shall have the right to require you to pay any taxes required by law to be withheld with respect to the grant of the Shares. If you do not agree to pay the taxes in cash, the Company shall have the right to decrease the number of Shares issued to you by an amount of Shares with a Fair Market Value equal to any taxes required by law to be withheld with respect to the grant of the Shares. For purposes of this Plan, “Fair Market Value” means the last quoted per share selling price for the Shares on the date immediately prior to the later of (Y) the date that Shareholder Approval is obtained or (Z) the date that Nasdaq approves the listing of additional shares form (the “Relevant Date”), or if there were no sales on such date, the last quoted per share selling price on the nearest day prior to the Relevant Date.
(v) If requested by the Company or any representative of an underwriter or placement agent (“Underwriter”) in connection with any registration of the offering of any securities of the Company under the Securities Act of 1933, as amended, including any offering made through the filing of a prospectus supplement pursuant to a shelf registration statement on Form S-3 (collectively, a “Registered Offering”), you agree that, following the execution of a definitive underwriting or placement agency agreement with respect to the Registered Offering, you shall not sell or otherwise transfer any Shares or other securities of the Company during any period, not to exceed 180 days, requested by the Underwriter and agreed to in writing by the Company (the “Market Standoff Period”). The Company may impose stop-transfer instructions with respect to any securities, including the Shares, subject to the foregoing restrictions until the end of such Market Standoff Period.
If the terms of this grant are agreeable to you, please countersign this Plan at the space designated below. Upon receipt of the later of Shareholder Approval or Nasdaq’s approval of the listing of additional shares form and your signed copy of this Plan, the Company will issue the Shares to you.
This Plan constitutes the entire agreement between the Company and you with respect to the issuance of the Shares and supersedes all prior agreements and understandings, both written and oral, among the Company and you with respect to the issuance of the Shares.
The contents of this Plan may not be amended except by an instrument in writing signed by you and the Company.
All questions concerning the construction, validity, enforcement and interpretation of this Plan shall be governed by the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. You and the Company hereby irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in the Borough of Manhattan in the City of New York, New York, for the adjudication of any dispute hereunder or in connection herewith. 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 LETTER OR ANY TRANSACTION CONTEMPLATED HEREBY.
We look forward to the coming year and to working with you to develop the Zone technology.
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Very truly yours,
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HELIOS AND MATHESON ANALYTICS INC.
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By:
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/s/
Stuart Benson
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Stuart Benson, Chief Financial Officer
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I have read the above Plan and agree to the terms.
Exhibit 10.2
January 20, 2017
[Name of Recipient]
[Address]
Ladies and Gentlemen:
2016 was an exciting and a challenging year for Helios and Matheson Analytics Inc. (the “Company”). With the assistance of [Name of Consultant] (the “Firm”), we were able to complete the merger of Zone Technologies, Inc. This letter, referred to herein as the “Plan”, constitutes an “employee benefit plan”, as that term is defined in Rule 405 promulgated under the Securities Act of 1933.
In appreciation for the Firm’s efforts, the Company will issue to the Firm 200,000 shares of its unregistered common stock, referred to in this Plan as the “Shares”, subject to the following:
(i) The Company will submit a listing of additional shares form to The Nasdaq Stock Market LLC (“Nasdaq”) covering the Shares. The Shares will not be issued unless and until Nasdaq approves the listing of additional shares form. If the listing of additional shares form is not approved by Nasdaq, this grant will be null and void and the Shares shall not be issued.
(ii) As a consultant, the Firm will have the obligation to pay, when and as due, any and all taxes incurred as a result of the issuance of the Shares.
If the terms of this grant are agreeable to you, please countersign this Plan at the space designated below. Upon receipt of Nasdaq’s approval of the listing of additional shares form and the Firm’s signed copy of this Plan, the Company will issue the Shares to the Firm.
Note that by signing this Plan at the space below, you confirm that the Firm is an accredited investor, as defined in Rule 501 promulgated under the Securities Act of 1933, as amended.
This Plan constitutes the entire agreement between the Company and the Firm with respect to the issuance of the Shares and supersedes all prior agreements and understandings, both written and oral, among the Company and the Firm with respect to the issuance of the Shares.
The contents of this Plan may not be amended except by an instrument in writing signed by the Firm and the Company.
All questions concerning the construction, validity, enforcement and interpretation of this Plan shall be governed by the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. The Firm and the Company hereby irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in the Borough of Manhattan in the City of New York, New York, for the adjudication of any dispute hereunder or in connection herewith. 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 LETTER OR ANY TRANSACTION CONTEMPLATED HEREBY.
Again, we thank the Firm for all of its hard work in 2016 and look forward to working with it in 2017.
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Very truly yours,
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HELIOS AND MATHESON ANALYTICS INC.
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By:
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/s/ Stuart Benson
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Stuart Benson, Chief Financial Officer
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I have read the above Plan and agree to the terms. I am authorized to sign the Plan on behalf of [Name of Consultant].
[Name of consultant]
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By:
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[Name and title of signatory]
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Exhibit 99.1
Media Contact:
Ashley Boarman
Landis Communications
(415) 359-2312
redzone@landispr.com
Helios and Matheson Analytics Inc.
Names Chairman Theodore Farnsworth as Chief Executive Officer
Former CEO, Pat Krishnan, to lead all technology operations as Chief Innovation Officer
MIAMI & NEW YORK
(Jan. 23, 2017) – Helios and Matheson Analytics Inc. (NASDAQ: HMNY) today announced that Theodore Farnsworth, HMNY’s Chairman of the Board, has been appointed as HMNY’s Chief Executive Officer. Farnsworth, founder of HMNY’s subsidiary, Zone Technologies, Inc., and creator of the RedZone Map smartphone app, is assuming the chief executive role of HMNY from Pat Krishnan, who is moving into the newly created position of Chief Innovation Officer.
“The integration of HMNY and RedZone is continuing at a rapid pace. I am thrilled to take on the chief executive role at HMNY, allowing Pat to focus on being our technology visionary while I focus on growing the company and RedZone’s reach,” said Farnsworth. “It’s important to make these changes now in order to fulfill the company’s overall vision, as well as its current and future technology needs,” continued Farnsworth.
As both Chairman and Chief Executive Officer, Farnsworth will lead the company’s strategic direction and all day-to-day operations. Mr. Krishnan will drive many technology-related functions of the company, including initiatives related to artificial intelligence and social listening. As Chief Innovation Officer, Mr. Krishnan will be assuming management of RedZone’s worldwide technology functions in the United States (Miami, New York and Silicon Valley), India and Israel.
“Being able to dedicate my full time and attention to the company’s technology innovation and development will put us on the fast track,” said Krishnan. “I believe doing so will enable us to accelerate our proprietary technology output and pursue the further incorporation of predictive analytics, computer learning and artificial intelligence into our RedZone Map application.”
About Helios and Matheson
Helios and Matheson Analytics Inc. (NASDAQ: HMNY) provides information technology consulting, training services, software products and an enhanced suite of services of predictive analytics. With its client roster including Fortune 500 corporations, HMNY focuses mainly on the BFSI and Technology verticals. HMNY’s solutions cover the entire spectrum of IT needs, including applications, data, and infrastructure. HMNY is headquartered in New York, NY and listed on the NASDAQ Capital Market under the symbol HMNY. For more information, visit us
www.hmny.com
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About RedZone Map
RedZone (Zone Technologies, Inc.) is a state-of-the-art mapping and spatial analysis company with operations in the U.S. and Israel. Its eye-opening safety map app enhances mobile GPS navigation by providing advanced proprietary technology to guide travelers to their destinations while avoiding risky areas deemed “red zones,” due to high groupings of crime data, with safer routes generally 15% longer. More than that, 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. Currently available to
iOS
and
Android
users. More information is available on the
RedZone Map website
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Media Contact:
Ashley Boarman
Landis Communications
(415) 359-2312
redzone@landispr.com
Cautionary Statement on Forward-looking Information
Certain statements in this communication contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 or under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, “forward-looking statements”) that may not be based on historical fact, but instead relate to future events, including without limitation statements containing the words “believe”, “may”, “plan”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect” and similar expressions. All statements other than statements of historical fact included in this communication are forward-looking statements.
Such forward-looking statements are based on a number of assumptions. Although HMNY’s management believes that the assumptions made and expectations represented by such statements are reasonable, there can be no assurance that a forward-looking statement contained herein will prove to be accurate. Actual results and developments may differ materially from those expressed or implied by the forward-looking statements contained herein and even if such actual results and developments are realized or substantially realized, there can be no assurance that they will have the expected consequences or effects. Risk factors and other material information concerning HMNY are described in its Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2015, its registration statement on Form S-3 declared effective on January 13, 2017 and other filings, including subsequent current and periodic reports and registration statements, filed with the U.S. Securities and Exchange Commission. You are cautioned to review such reports and other filings at www.sec.gov.
Given these risks, uncertainties and factors, you are cautioned not to place undue reliance on such forward-looking statements and information, which are qualified in their entirety by this cautionary statement. All forward-looking statements and information made herein are based on HMNY’s current expectations and HMNY does not undertake an obligation to revise or update such forward-looking statements and information to reflect subsequent events or circumstances, except as required by law.
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