The information
in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement and the accompanying
prospectus are not an offer to sell these securities and they are not soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
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PROSPECTUS SUPPLEMENT
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Filed
Pursuant to Rule 424(b)(5)
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To prospectus
dated February 9, 2018
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Registration
No. 333-222685
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Subject
to completion dated July 10, 2018
Series
A-3 Units consisting of One Share of Common Stock and One Series A-3
Warrant to Purchase Shares of Common Stock
Series
B-3 Units consisting of One Pre-Funded Series B-3 Warrant to
Purchase One Share of Common Stock and One Series A-3 Warrant to
Purchase Shares of Common Stock
We
are offering on a “best-efforts” basis Series A-3 units (the “Series
A-3 Units”), with each Series A-3 Unit consisting of (i) one share of common stock and (ii) one Series A-3 Warrant to purchase
shares of common stock (the “Series A-3 Warrants”).
We
are also offering to those purchasers whose purchase of Series A-3 Units in this offering would result in the purchaser, together
with its affiliates and certain related parties, beneficially owning more than 9.99% of our outstanding common stock following
the consummation of this offering, in lieu of Series A-3 Units that would otherwise result in ownership in excess of 9.99% of
our outstanding common stock, Series B-3 units
(the “Series B-3 Units,” and together with the “Series A-3 Units”, the “Units”), with each
Series B-3 Unit consisting of (i) one pre-funded Series B-3 Warrant to purchase one share of common stock (the “Series B-3
Warrants,” and together with the Series A-3 Warrants, the “Warrants”) and (ii) one Series A-3 Warrant.
Each
Unit will be sold at a price of $ per Unit. The Units will not be issued or certificated.
The shares of common stock, Series A-3 Warrants and Series B-3 Warrants will all be immediately separable and issued separately,
but will be purchased together in this offering. This prospectus supplement also relates to the offering of the shares of common
stock issuable upon exercise of the Warrants.
The
Warrants will be exercisable at any time on or after the issuance date until the five-year anniversary of the issuance date. Each
Series A-3 Warrant will be exercisable at a price of $ per share of our common stock,
subject to adjustment. Each Series B-3 Warrant will have an aggregate exercise price of $
per share of our common stock, all of which will be pre-funded except for a nominal exercise price of $0.001 per share of our
common stock, subject to adjustment.
For
a more detailed description of our common stock, Series A-3 Warrants and Series B-3 Warrants, see the section entitled “Description
of the Securities We are Offering” beginning on page S-20 of this prospectus supplement.
Our
common stock trades on the Nasdaq Capital Market under the symbol “HMNY”. The last reported trading price of our common
stock on July 9, 2018 was $0.192 per share. There is no public trading market for the Warrants, we do not expect a market to develop,
and purchasers may not be able to resell the Warrants purchased under this prospectus supplement. In addition, we do not intend
to apply for a listing of the Warrants on the Nasdaq Capital Market, any other national securities exchange, or any nationally
recognized trading system. This may affect the pricing of the Warrants in the secondary market, the transparency and availability
of trading prices, and the liquidity of the Warrants.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page S-10 of this prospectus supplement
and page 7 of the accompanying prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
passed on the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary
is a criminal offense.
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Price
per
Unit
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Total
(2)
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Offering price
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$
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$
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Underwriting discounts
and commissions
(1)
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$
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$
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Proceeds to us before
expenses
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$
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$
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(1)
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In
addition, we have agreed to reimburse the underwriters for certain offering-related expenses. We refer you to “Underwriting”
beginning on page S-22 of this prospectus supplement for additional information regarding total underwriting compensation.
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(2)
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Total
proceeds includes an aggregate of $ that will be funded upon the exercise of all
Series B-3 Warrants sold in the offering.
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This
offering is being completed on a “best efforts” basis and the underwriters have no obligation to buy any Series A-3
Units or Series B-3 Units from us or to arrange for the purchase or sale of any specific number or dollar amount of Series A-3
Units or Series B-3 Units.
The
underwriters expect to deliver the securities offered hereby on or about July , 2018.
Sole
Bookrunner
Canaccord
Genuity
The
date of this prospectus supplement is July , 2018.
TABLE
OF CONTENTS
Prospectus
Supplement
Prospectus
ABOUT
THIS PROSPECTUS SUPPLEMENT
In
this prospectus supplement, unless the context otherwise requires, references to “we,” “us,” “our,”
“our company,” “the Company” or “Helios” refer to Helios and Matheson Analytics Inc. and its
subsidiaries.
This
prospectus supplement and the accompanying prospectus relate to the offering of shares of our common stock and warrants to purchase
shares of our common stock. Before buying any of the shares of common stock and warrants to purchase shares of our common stock
offered hereby, we urge you to carefully read this prospectus supplement and the accompanying prospectus, together with the information
incorporated herein by reference as described under the headings “Where You Can Find More Information” and “Information
Incorporated by Reference”. These documents contain important information that you should consider when making your investment
decision. This prospectus supplement contains information about the common stock and warrants offered hereby and may add, update
or change information in the accompanying prospectus.
You
should rely only on the information that we have provided or incorporated by reference in this prospectus supplement and the accompanying
prospectus. Neither we nor the underwriters (nor any of the underwriters’ affiliates) have authorized any other person to
provide you with different information. If anyone provides you with different or inconsistent information, you should not rely
on it.
We
and the underwriters are not making offers to sell or solicitations to buy our securities in any jurisdiction in which an offer
or solicitation is not authorized or in which the person making that offer or solicitation is not qualified to do so or to anyone
to whom it is unlawful to make an offer or solicitation. You should assume that the information in this prospectus supplement
and the accompanying prospectus or any related free writing prospectus is accurate only as of the date on the front of the document
and that any information that we have incorporated by reference is accurate only as of the date of the document incorporated by
reference, regardless of the time of delivery of this prospectus supplement, the accompanying prospectus or any related free writing
prospectus, or any sale of a security.
This
document is in two parts. The first part is this prospectus supplement, which adds to and updates information contained in the
accompanying prospectus. The second part is the accompanying prospectus which provides more general information, some of which
may not apply to this offering. Generally, when we refer to this prospectus supplement, we are referring to both parts of this
document combined. To the extent there is a conflict between the information contained in this prospectus supplement and the information
contained in the accompanying prospectus, you should rely on the information in this prospectus supplement.
This
prospectus supplement and the accompanying prospectus contain summaries of certain provisions contained in some of the documents
described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in
their entirety by the actual documents. Copies of some of the documents referred to herein have been or will be filed as exhibits
to the registration statement of which this prospectus supplement is a part or as exhibits to documents incorporated by reference
herein, and you may obtain copies of those documents as described below under the headings “Where You Can Find More Information”
and “Information Incorporated by Reference”.
The
industry and market data and other statistical information contained in this prospectus supplement, the accompanying prospectus
and the documents we incorporate by reference are based on management’s estimates, independent publications, government
publications, reports by market research firms or other published independent sources, and, in each case, are believed by management
to be reasonable estimates. Although we believe these sources are reliable, we have not independently verified the information.
None of the independent industry publications used in this prospectus supplement, the accompanying prospectus or the documents
we incorporate by reference were prepared on our or our affiliates’ behalf and none of the sources cited by us consented
to the inclusion of any data from its reports, nor have we sought their consent.
DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement and the accompanying prospectus, including the documents that we incorporate by reference, may contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Forward-looking
statements in this prospectus supplement and the accompanying prospectus include, without limitation, statements related to our
financial and operating performance, our plans, strategies, objectives, expectations, intentions and adequacy of resources. Certain
important risks, including those discussed in the risk factors set forth under “Risk Factors” of this prospectus supplement,
could cause results to differ materially from those anticipated by some of the forward-looking statements. Some, but not all,
of these risks include, among other things:
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ability to successfully develop the business model of MoviePass Inc. (“MoviePass”), our majority-owned subsidiary;
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our
ability to integrate the operations of MoviePass into our operations;
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our
capital requirements and whether or not we will be able to raise capital when we need it;
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changes
in local, state or federal regulations that will adversely affect our business;
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our
ability to retain our existing clients and market and sell our services to new clients;
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whether
we will continue to receive the services of certain officers and directors;
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our
ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights
of others;
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our
ability to effectively react to other risks and uncertainties described from time to time in our filings with the Securities
and Exchange Commission, such as fluctuation of quarterly financial results, reliance on third party consultants, litigation
or other proceedings and stock price volatility;
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our
ability to regain compliance with The Nasdaq Stock Market LLC’s listing maintenance standards; and
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other
uncertainties, all of which are difficult to predict and many of which are beyond our control.
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In
some cases, you can identify forward-looking statements by terminology such as ‘‘may,’’ ‘‘will,’’
‘‘should,’’ ‘‘could,’’ ‘‘expects,’’ ‘‘plans,’’
‘‘intends,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’
‘‘predicts,’’ ‘‘potential,’’ or ‘‘continue’’ or the negative
of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation
to publicly update or review any forward-looking statement.
PROSPECTUS
SUPPLEMENT SUMMARY
OUR
BUSINESS
This
is only a summary and may not contain all the information that is important to you. You should carefully read both this prospectus
supplement and the accompanying prospectus and any other offering materials, together with the additional information described
under the heading “Where You Can Find More Information”.
About
Helios and Matheson Analytics Inc.
Overview
We
provide high quality information technology, or IT, services and solutions including a range of technology platforms focusing
on big data, business intelligence, and consumer-centric technology. More recently, to provide greater value to stockholders,
we have sought to expand our business primarily through acquisitions that leverage our capabilities and expertise.
On
November 9, 2016, we acquired Zone Technologies, Inc. (“Zone”), a state-of-the-art mapping and spatial analysis company,
and on December 11, 2017, we acquired a majority interest in MoviePass Inc. (“MoviePass”), whose primary product offering
is MoviePass™, the nation’s premier movie theater subscription service. Since December 2017, we have acquired additional
shares of MoviePass common stock and as of the date of this prospectus supplement, we own approximately 91.8% of MoviePass’
outstanding common stock (excluding shares underlying MoviePass options and warrants).
MoviePass
Ventures, LLC (“MoviePass Ventures”) was formed as a Delaware limited liability company in January 2018 and is a wholly
owned subsidiary of the Company. MoviePass Ventures aims to collaborate with film distributors to share in film revenues while
using the data analytics MoviePass offers for marketing and targeting services for MoviePass’ paying subscribers using the
platform.
On
April 4, 2018, we acquired Moviefone assets from Oath Inc. (formerly, AOL Inc.), an entertainment service owned by Oath Inc.,
a wholly-owned subsidiary of Verizon Communications Inc. Moviefone provides over 6 million monthly unique visitors full access
to the entertainment ecosystem, from movie theaters to streaming content.
On
May 30, 2018 we formed MoviePass Films LLC (“MoviePass Films”) with Emmett Furla Oasis Films (“EFO Films”).
Helios owns 51% and EFO Films owns 49% of MoviePass Films. MoviePass Films focuses on studio-driven content and new film production
for theatrical release and other distribution channels. We plan to capitalize on the capabilities of MoviePass to market
future MoviePass Films productions to MoviePass subscribers.
MoviePass
MoviePass
was incorporated in Delaware in 2011 and is the leading movie theater subscription service in the United States that allows members
to see a new movie every day in theaters nationwide for a low fixed price. Once they sign up for the MoviePass service online,
subscribers are prompted to download the MoviePass application on their smart phones and are then mailed a MoviePass debit card.
The MoviePass application shows subscribers the show times of all the movies that are currently showing at the local movie theaters
listed in the MoviePass application. Once they have received their MoviePass debit card, subscribers can use the debit card to
purchase up to one movie ticket per day at any of the movie theaters listed in the MoviePass application without paying any additional
costs.
During
the four months after MoviePass’ announcement of its $9.95 per month subscription plan in August 2017, MoviePass grew to
over 1,000,000 total paying subscribers including those on either its monthly or annual plans. This represents strong growth when
compared to other subscription-based companies, such as Spotify, Hulu, ClassPass and Netflix, which achieved 1,000,000 subscribers
in over 5, 10, 17 and 39 months, respectively, estimated based on information available publicly from various news and other sources.
MoviePass surpassed 1,500,000 paying subscribers in January 2018, 2,000,000 paying subscribers in February 2018 and as of the
date of this prospectus, MoviePass has over 3,000,000 paying subscribers.
In
March 2018, MoviePass announced that, for a limited time, it would offer its annual subscription to new subscribers for $6.95
per month, paid annually and with a one-time processing fee of $6.55.
MoviePass
is led by Mitch Lowe, its Chief Executive Officer, Sanjay Puri, its Chief Strategy Officer, Bernadette McCabe, its Senior Vice
President of Exhibitor Relations, Mike Berkley, Chief Product Officer, Khalid Itum, Vice President of Business Development and
Chris Kelly, its Chairman. The Company intends to combine its data and artificial intelligence technology with MoviePass’
technology. With our big data and artificial intelligence platforms and other technologies that we own, we believe we will be
able to bring a significant technological advantage to MoviePass.
MoviePass
Ventures
MoviePass
Ventures aims to collaborate with film distributors to share in distribution fees while using the data analytics MoviePass offers
for marketing and targeting services for MoviePass’ paying subscribers using the platform. MoviePass Ventures has consummated
two strategic transactions in films: “American Animals,” which premiered at the 2018 Sundance Film Festival, and “Gotti,”
which premiered at the 2018 Cannes Film Festival. Through these two transactions, MoviePass Ventures is entitled to participate
in revenues from the theatrical window, rentals and other downstream and ancillary revenue streams: subscription-video-on-demand,
transactional-video-on-demand, airline, and foreign sales. We expect that these transactions will also result in paid marketing
services arrangements for MoviePass. MoviePass Ventures' investments in American Animals and Gotti have garnered
international media attention and we believe, continue to bolster MoviePass' brand recognition.
Moviefone
We
believe the Moviefone acquisition will help MoviePass continue to grow its subscriber base and expand its marketing and advertising
platform for its studio and brand partners. We also believe Moviefone will allow us and MoviePass to provide relevant and appealing
content to moviegoers while simultaneously increasing the value of the Moviefone brand.
MoviePass
and MoviePass Ventures Market Opportunity
Movie
going is embedded in American society and enjoyed by people of all races, ages and socio-economic levels. The 2016 Theatrical
Market Statistics Report issued by the Motion Picture Association of America (the “MPAA Report”) reports that more
than three quarters (76%) of the U.S./Canada population aged two or older, or 263 million people, went to a movie at the cinema
at least once in 2017. According to the MPAA Report, the typical moviegoer bought 4.7 tickets per year in 2017, for a total of
$1.24 billion in tickets sold in 2017. Moreover, according to the MPAA Report, 12% of the U.S./Canada population are frequent
moviegoers who attend the cinema once a month or more. These individuals are responsible for 49% of all tickets sold. More than
half the population are occasional moviegoers (53%), who are also responsible for 49% of all tickets. In 2017, 24% of the U.S./Canada
population did not attend the cinema.
MoviePass
intends to encourage increased attendance at movie theaters with the subscription model by targeting the occasional movie goer
(those who attend less than once a month) who represent 82% of the total movie going market.
MoviePass’
current buying power at U.S. movie theaters represents approximately 6% of the U.S. box office, with MoviePass buying approximately
one in every seventeen tickets in the United States. Its strong subscriber trends and potential for customer engagement drive
several revenue opportunities. The value proposition to consumers to obtain low-cost access to regular theater attendance can
benefit key constituents and customers of MoviePass’ business: exhibitors, studios, distributors and consumers themselves.
Through its continued efforts at targeting and improving the consumer experience, MoviePass aims to maintain its strong subscriber
growth and to leverage such growth with its key constituents to improve operational efficiencies, create cross-platform synergies
and create multiple growing revenue streams.
MoviePass
Ventures aims to leverage the Company’s and MoviePass’ ability to increase attendance in movie theaters to improve
marketing efforts and work directly with distributors to drive consumers toward particular independent films and to share in the
economic performance of such films.
Competition
MoviePass
and MoviePass Ventures
The
market for filmed entertainment ticketing services is intensely competitive and subject to rapid change. MoviePass’ potential
competitors include Atom Tickets, MovieTickets.com, Fandango, AMC Entertainment Holdings Inc.’s AMC Stubs program, Regal
Entertainment Group’s Regal Crown Club and Cinemark Holdings, Inc.’s Movie Club, as well as other potential exhibitors
offering their own subscription services or loyalty programs. In addition, Sinemia Inc. offers a movie theater subscription service
that functions similarly to MoviePass.
AMC
Stubs is a loyalty program offered by AMC Entertainment Holdings Inc. (“AMC”) with approximately 12.8 million household
members. Movie goers can join the loyalty program as either a basic member for free or a premiere member for $15. The basic membership
offers free popcorn refills, up to a $5 discount on tickets on Tuesdays, $5 rewards for every 5,000 points (points are earned
at a rate of 20 points for every $1 spent), waived online ticket fees for four tickets or more and free popcorn on the member’s
birthday. Premiere members receive free upgrades on popcorn and soda, earn 100 points for every $1 spent, waived online ticket
fees every time, free popcorn and soda on the member’s birthday, and all the other benefits that come with the basic membership.
On
June 26, 2018, AMC launched a new VIP tier of its AMC Stubs program called the AMC Stubs A-List, which is a subscription service
that allows subscribers to see up to three movies a week for a monthly fee of $19.95. If fewer than three movies are seen in a
week, there is no carry over. AMC Stubs A-List members can see films in premium formats, watch multiple movies in the same day
or watch films multiple times. The members have all the benefits of the premiere membership as well as express service at the
box office and concession stand, no online ticketing fees and 100 points for every $1 spent.
Regal
Entertainment Group also offers a loyalty program with approximately 14 million active members called the Regal Crown Club. The
program only has one membership option and is free to join. Regal Crown Club members earn credits for every $1 they spend on movie
tickets and at concession stands. Points can be redeemed for rewards via the use of a physical card or a virtual card with Regal’s
mobile app. Rewards include free concession items, merchandise, movie tickets and more. In addition, Regal Entertainment Group
is offering $1 admission to family movies this summer from June 19, 2018 to August 22, 2018, which will play on Tuesdays and Wednesdays
at participating theaters.
On
December 5, 2017, Cinemark Holdings Inc. launched Movie Club. Movie Club is a monthly subscription plan that allows subscribers
to buy one movie ticket a month for a discounted price of $8.99. Members of Movie Club can roll over unused tickets from month
to month and receive a 20% discount on items bought at concession stands. Movie Club membership is only valid at Cinemark theaters.
Many
of these competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater
financial, marketing and other resources than MoviePass does. Some of these competitors have adopted, and may continue to adopt,
aggressive pricing policies and devote substantially more resources to marketing and website and systems development than MoviePass
does. In addition, MoviePass’ competitors may form or extend strategic alliances with studios, exhibitors and distributors
that could affect adversely MoviePass’ ability to compete on favorable terms.
As
a new entrant into film distribution, MoviePass Ventures will have competitors with longer operating histories in the distribution
of independent films, deeper ties with industry executives and film producers, and greater financial, marketing and other resources
than MoviePass Ventures. MoviePass Ventures will also face competition from larger film distributors which focus on higher budget
film production and distribution.
MoviePass
Intellectual Property
MoviePass
uses a combination of trademark, copyright and trade secret laws and confidentiality agreements to protect its proprietary intellectual
property. MoviePass has a registered trademark for the MoviePass name. MoviePass owns U.S. Patent Nos. 8,484,133, 8,612,235, and
9,135,578. MoviePass has filed applications for additional trademarks and two patents. MoviePass’ outstanding trademark
and patent applications may not be allowed. Even if these applications are allowed, they may not provide MoviePass with a competitive
advantage. Competitors may challenge successfully the validity and scope of MoviePass’ patents and trademark(s). MoviePass’
trademark(s), trademark applications, patents, and patent applications may not provide MoviePass with a competitive advantage.
To date, MoviePass has relied primarily on proprietary processes and know-how to protect its intellectual property related to
its Web site, mobile application and fulfillment processes.
From
time to time, MoviePass may encounter disputes over rights and obligations concerning intellectual property. MoviePass believes
that its service offering does not infringe the intellectual property rights of any third party. However, it cannot assure you
that MoviePass will prevail in any intellectual property dispute.
MoviePass/Fandor/Costco
Subscription Offer
On
December 12, 2017, MoviePass and Fandor, the streaming service with the largest collection of independent films, documentaries,
international features and shorts, announced that both companies partnered with Costco Wholesale Corporation (“Costco”)
to offer a one-year subscription plan for a flat fee of $70.00 paid in advance. The subscription plan for both services was made
available exclusively to Costco members for a limited time and covers a year of membership for both MoviePass and Fandor. The
subscription plan was extended through February 2018.
MoviePass/Fandor
In
February 2018, MoviePass and Fandor launched a limited-time annual subscription plan to allow movie-goers to see a new movie in
a movie theater every day for a year, and have access to the full Fandor content library for a year, for a flat fee of $105.35
paid in advance ($7.95 per month plus a one-time $19.95 processing fee less $10.00 of revenue share with Fandor).
Zone
Spin-Off
In
March 2018, we announced that our Board of Directors approved a plan to spin-off Zone, our wholly-owned subsidiary. Following
the spin-off, Zone would become an independent publicly traded company that we would expect to also be listed on Nasdaq. The spin-off
is subject to numerous conditions, including, 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, we plan to distribute shares of Zone common stock as a dividend to persons who hold our common stock as of a
record date to be determined. We expect 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 of our convertible notes
and warrants 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 separate
companies, each of which can focus on its own strengths and operational plans and be publicly traded. There is no assurance that
we will be able to complete the spin-off, and our Board of Directors may at any time decide not to proceed with the spin-off.
Financial
Update
As
of June 30, 2018, we had approximately $13.7 million in available cash and approximately $32.2 million on deposit with our merchant
and fulfillment processors for a total of approximately $45.9 million. The funds held by these processors represent a portion
of the payments received for annual and other extended term MoviePass subscription plans and future ticket fulfillment, which
we classify as current assets on our balance sheet and which we expect to be disbursed to us or utilized during 2018.
As
of July 10, 2018, there was $0.8 million of unrestricted principal owed under the convertible notes we issued in November 2017,
under the January 2018 notes there is no unrestricted principal outstanding and there is $ 20.2 million of unrestricted principal
owed under the convertible notes we issued in June 2018. We also owe $1.7 million in interest and certain make-whole obligations
under such notes.
Corporate
Information
Our
executive offices are located at The Empire State Building, 350 Fifth Avenue, New York, New York 10118, and our telephone number
is (212) 979-8228. Additional information about us is available on our website at
www.hmny.com
. The information contained
on or that may be obtained from our website is not, and shall not be deemed to be, a part of this prospectus supplement. Our common
stock, par value $0.01 per share, is currently traded on the Nasdaq Capital Market under the ticker symbol “HMNY”.
For
a description of our business, financial condition, results of operations and other important information regarding us, we refer
you to our filings with the SEC incorporated by reference in this prospectus supplement. For instructions on how to find copies
of these documents, see “
Where You Can Find More Information
.”
THE
OFFERING
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Series
A-3 Units offered by us
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Series
A-3 Units with each Series A-3 Unit consisting of (i) one share of common stock and (ii) one Series A-3 Warrant.
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Series
B-3 Units offered by us
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Series
B-3 Units with each Series B-3 Unit consisting of (i) one pre-funded Series B-3 Warrant and (ii) one Series A-3 Warrant.
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Offering
Price
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$
per Unit.
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Common
stock outstanding after the offering
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shares
of common stock (assuming the warrants offered by us in this offering were to be immediately issued and exercised in full)
(1)
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Warrants
offered by us
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Series
A-3 Warrants to purchase up to
shares of common stock. Each Series A-3 Warrant will be exercisable for our common stock
at a price of $ per share, subject to adjustment.
Series
B-3 Warrants to purchase up to shares
of common stock. Each Series B-3 Warrant will have an aggregate exercise price of $ per
share of our common stock, all of which will be pre-funded except for a nominal exercise price of $0.001 per share of
our common stock, subject to adjustment.
The
Series A-3 Warrants will not be exercisable until stockholders approve an amendment to our certificate of incorporation
to increase our authorized common stock or to effect a reverse stock split, and will expire on the five-year anniversary
of issuance. The Series B-3 Warrants will be immediately exercisable. This prospectus supplement also relates to the offering
of shares of our common stock issuable upon exercise of the Warrants.
There
is no established public trading market for the Warrants and we do not expect a market to develop. We do not intend to
apply for a listing of the Warrants on any national securities exchange. Without an active market, the liquidity of the
Warrants will be limited.
See
“Description of the Securities we are Offering – Warrants.”
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Best
Efforts
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We
have agreed to issue and sell the Series A-3 Units and Series B-3 Units offered hereby to the public through the underwriters,
and the underwriters have agreed to offer and sell such securities on a “best efforts” basis. The underwriters
are not required to sell any specific number or dollar amount of the securities offered hereby, but will use their best efforts
to sell such securities. See “Underwriting” on page S-22.
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Risk
Factors
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Investing
in our common stock and warrants involves a high degree of risk. See “Risk Factors” beginning on page S-10, as
well as the other information included in or incorporated by reference in this prospectus supplement and the accompanying
prospectus, for a discussion of risks you should carefully consider before investing in our securities.
|
|
Use
of Proceeds
|
We
may use the net proceeds from the sale of the common stock and warrants offered by us under this prospectus supplement for
general corporate purposes of the Company and its subsidiaries and transaction expenses. See “Use of Proceeds”
on page S-15.
|
|
|
|
|
Nasdaq
Capital Market Symbol
|
“HMNY”
|
|
(1)
|
The
number of shares of common stock to be outstanding after this offering is based on 268,749,677 shares of common stock outstanding
as of July 10, 2018, and excludes, in each case as of July 10, 2018:
|
|
|
●
|
2,610,000
shares of common stock available and reserved for issuance pursuant to the Helios and Matheson Analytics Inc. 2014 Equity
Incentive Plan;
|
|
|
●
|
7,050,399
shares of common stock that may be issued upon the exercise of warrants by Palladium Capital Advisors LLC;
|
|
|
●
|
4,636,355
shares of common stock reserved for issuance to various officers, directors, employees and consultants;
|
|
|
●
|
4,000,001
shares of common stock issuable to MoviePass upon receipt of stockholder approval and unrestricted conversion of the
convertible promissory note in the principal amount of $12 million that we issued to MoviePass upon the closing of the
Securities Purchase Agreement, dated August 15, 2017, between the Company and MoviePass;
|
|
|
●
|
207,977,504 shares of common stock issuable upon the conversion of restricted and unrestricted principal and related interest
and make-whole payments under the convertible debt for which the majority of the amount owed to us under the
applicable investor notes has not yet been paid to the Company. Such restricted principal amount may not, as of
the date of this prospectus supplement, be converted into any shares of common stock;
|
|
|
●
|
12,721,500
shares of common stock issuable upon the exercise of warrants issued in public offerings in December 2017, February 2018 and
April 2018;
|
|
|
●
|
2,550,154
shares of common stock issuable upon the exercise of warrants, issued to Oath upon the closing of the Moviefone Acquisition;
|
|
|
●
|
500,000
shares reserved for issuance to Helios and Matheson Information Technology Ltd. in exchange for entering into prior lockup
agreements and a new 12-month lockup agreement;
|
|
|
●
|
Approximately
$92.8 million of common stock that may be issued in our outstanding “at-the-market” offering (the “ATM Offering”);
and
|
|
|
|
|
|
|
●
|
164,000,000
shares issuable upon conversion of the convertible notes we issued in June 2018, upon receipt of stockholder approval.
|
RISK
FACTORS
Investing
in our common stock involves a high degree of risk. Please see the risk factors set forth in Part I, Item 1A of our most recent
Annual Report on Form 10-K and in Part II, Item 1A of our Quarterly Reports on Form 10-Q and other filings we make with the SEC,
which are incorporated by reference into this prospectus supplement. Before making an investment decision, you should carefully
consider these risks as well as other information we include or incorporate by reference in this prospectus supplement. The risks
and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial may also affect our business operations. These risks could materially affect our business,
results of operations or financial condition and cause the value of our securities to decline.
Risks
Related to this Offering and our Common Stock and Warrants
The
proceeds from this offering, along with our cash and cash equivalents, may not be sufficient to fund our operations for the near
future and we may not be able to obtain additional financing.
As
of June 30, 2018, we had approximately $13.7 million in available cash and approximately
$32.2 million on deposit with our merchant and fulfillment processors for a total of approximately
$45.9 million. The funds held by these processors represent a portion of the payments received
for annual and other extended term MoviePass subscription plans and future ticket fulfillment, which we classify as current assets
on our balance sheet and which we expect to be disbursed to us or utilized during 2018. Our average monthly cash deficit has been
approximately $26.9 million per month from September 30, 2017 to June 30, 2018 inclusive of
our processor deposits. Due to our greater than anticipated subscriber growth in June 2018, our cash deficit for the month of
June 2018 is expected to be approximately $45.0 million and we anticipate our cash deficit for the month
of July 2018 will be at least $45.0 million due to significant subscriber growth, increased
theater attendance during the summer months and strong box office results of recently released films. As the MoviePass subscriber
base increases rapidly, and as we increase our investments in movies through MoviePass Ventures and MoviePass Films, and make
other acquisitions, our monthly cash deficit will continue to increase in the coming months.
The
anticipated proceeds from this offering, along with our cash and cash equivalents, may not be sufficient to fund our operations
for the near future and we may not be able to obtain additional financing. We will continue to require significant proceeds from
sales of our debt or equity securities, including common stock pursuant to our ATM Offering, among other sources of capital. Furthermore,
to the extent we use any net proceeds from sales of our securities for acquisitions of other businesses or financial interests
in additional movies (through our subsidiaries, MoviePass Ventures or MoviePass Films), we will need additional capital to offset
our monthly cash deficit to the extent resulting from those further investments.
Our
access to additional equity capital will depend, in part, on our ability to obtain the requisite stockholder approval at a special
meeting of stockholders (the “Special Meeting”), as described in our definitive proxy statement filed with the SEC
on July 5, 2018, to increase our authorized common stock, to effect a reverse stock split and to issue shares of common stock
pursuant to the convertible notes we issued to an institutional investor in January 2018 (the “Special Meeting Proposals”).
As of July 10, 2018, we had 268,749,677 shares outstanding out of our currently authorized 500,000,000 shares of common stock.
If we are unable to obtain the requisite stockholder approval of the Special Meeting Proposals, our access to additional equity
capital, including through our ATM Offering, will be significantly diminished, until or unless we are able to obtain such approval.
In that case, we would be reliant on seeking non-convertible debt capital, which may not be available on acceptable terms, if
at all, or voluntary prepayments from our institutional investors under the investor notes payable to us that we hold totaling
$226 million in aggregate principal amount.
If
we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned growth
or otherwise alter our business model, objectives and operations, which could harm our business, financial condition and operating
results.
Any
failure to maintain effective internal control over our financial reporting could materially adversely affect us.
Section
404 of the Sarbanes-Oxley Act of 2002 requires us to include in our annual reports on Form 10-K an assessment by management of
the effectiveness of our internal control over financial reporting. Our management assessed our internal control over financial
reporting as of December 31, 2017. Based on such assessment, we concluded that our internal control over financial reporting was
not effective as of December 31, 2017 to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
The material weakness we have identified is as follows:
|
|
●
|
Due
to the significant number of transactions that occurred during the fourth quarter of 2017 including, but not limited to, the
acquisition of MoviePass and the related financing arrangements, it was determined that we had inadequate monitoring controls
in place related to our financial reporting, debt and equity related transactions and other management oversight procedures
due to the lack of sufficient accounting resources to complete an effective review of the various complex and significant
transactions.
|
The
MoviePass acquisition on December 11, 2017 and the post-acquisition integration related activities represents a material change
in our internal control over financial reporting. We are in the process of evaluating the impact of the acquisition on our internal
control over financial reporting as well as the necessary controls and procedures to be implemented.
Our
internal control over financial reporting will not prevent or detect all error and all fraud. A control system, no matter how
well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will
be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that
misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. If we are
not able to comply with the requirements of Section 404 in a timely manner, if we do not remedy the current material weakness
or if we identify additional material weaknesses in our internal controls, investors could lose confidence in the reliability
of our financial statements, the market price of our stock could decline and we could be subject to sanctions or investigations
by the SEC, or other regulatory authorities.
Our
common stock may be subject to delisting from The Nasdaq Capital Market if we do not obtain the requisite stockholder approval
to effect a reverse stock split.
On
June 21, 2018, we received a deficiency letter from the Nasdaq Listing Qualifications Department notifying us that, for the prior
thirty consecutive business days, the closing bid price for our common stock had closed below the minimum $1.00 per share requirement
for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).
In accordance with Nasdaq Listing Rules, we have been given 180 calendar days, or until December 18, 2018 to regain compliance
with the Minimum Bid Price Requirement. If we are not in compliance with the Minimum Bid Price Requirement by December 18, 2018,
we may be afforded a second 180 calendar day grace period. To qualify, we would be required to meet the continued listing requirements
for market value of publicly held shares and all initial listing standards for The Nasdaq Capital Market, except for the Minimum
Bid Price Requirement. In addition, we would be required to notify Nasdaq of our intent to cure the deficiency during the second
compliance period, which may include, if necessary implementing a reverse stock split.
To
regain compliance with the Minimum Bid Price Requirement, we filed with the SEC, a proxy statement for a special meeting of stockholders
(the “Special Meeting”), which includes a proposal to approve an amendment to our Certificate of Incorporation to
effect a one-time reverse stock split of common stock at a ratio of 1 share-for-2 shares up to a ratio of 1 share-for-250 shares,
which ratio will be selected by our Board of Directors. If we choose to implement a reverse stock split, it must be completed
no later than ten business days prior to December 18, 2018. There can be no assurance that our stockholders will approve the reverse
split proposal or that the reverse split will result in a sustained increase in the per share market price for the common stock
so we can regain compliance with the Minimum Bid Price Requirement.
If
we do not regain compliance with the Minimum Bid Price Requirement by December 18, 2018 and we are not eligible for an additional
compliance period at that time, the staff will provide written notification to us that our common stock may be delisted. At that
time, we may appeal the staff’s decision to a Nasdaq Listing Qualifications Panel (the “Panel”). We would remain
listed pending the Panel’s decision. There can be no assurance that, if we do appeal a subsequent delisting determination
by the staff to the Panel, that such an appeal would be successful.
If
we are not able to regain compliance with the Minimum Bid Price Requirement, our common stock could be traded on an electronic
bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it would
become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely be a reduction
in our coverage by security analysts and the news media, which could cause the price of our common stock to decline further. Additionally,
the sale or purchase of our common stock would likely be made more difficult and the trading volume and liquidity of our common
stock would likely decline. A delisting from The Nasdaq Capital Market would also result in negative publicly and would negatively
impact our ability to raise capital in the future.
The
sale of a substantial amount of our common stock in the public market and the issuance of shares reserved for issuance to consultants
and upon conversion of convertible instruments could adversely affect the prevailing market price of our common stock.
As
of July 10, 2018 we had 268,749,677 shares of common stock issued and outstanding and the closing sale price of our common stock
on July 9, 2018 was $0.192.
The
issuances of convertible notes in December, 2016, February, 2017, August, 2017, November 2017, January, 2018 and June, 2018 (collectively,
the “Notes”) and the subsequent transactions, resulted in a high volume of activity for our securities. We may engage in similar transactions, which transactions may include
registration rights. The registration of such additional securities and the potential for high volume trades of our common stock
in connection with these financings may have a downward effect on our market price. In addition, in connection with the Notes,
we issued five-year warrants to a financial advisor, of which 1,610,399 are currently exercisable.
Future issuance of our common stock upon exercise of these warrants may have a further negative impact on our stock price.
Further,
as a result of the issuance of additional convertible notes on each of November 7, 2017, January 23, 2018, and June 26,
2018 371,977,504 shares of our common stock may be issuable upon conversion of outstanding debt. We have repaid in cash
unrestricted principal in the amounts of $20,650,000 and $25,000,000 under the November 7, 2017 and the January 23,
2018 convertible notes, respectively, as a result $0.8 million of unrestricted principal remains outstanding under those
convertible notes as of the date of this prospectus supplement. As of July 10,
2018, $20.2 million of unrestricted principal is outstanding under the convertible note
issued on June 26, 2018. As such, 139,000,000 of
the shares noted above represent shares issuable upon conversion of restricted principal under such convertible debt for
which an equivalent amount owed to us under the applicable notes has not yet been paid. Such restricted principal may not, as
of the date of this prospectus supplement, be converted into any shares of our common stock. However, if holders of these
notes provide additional payments to us under these notes, these shares will no longer constitute restricted principal and
may be issuable by us to the holders.
Finally,
as of July 10, 2018, we have reserved for issuance, but not yet issued, a substantial amount of additional shares that are included
in “Summary – The Offering – Common stock outstanding after the offering.” The issuance of shares we are
obligated to issue, the issuance of shares we may issue in connection with conversion or exercise of our outstanding convertible
instruments and shares we may issue in the ATM Offering may result in a higher volume trading of our securities, which may increase
dilution of existing investors and further depress the market price of our common stock, which may negatively affect our stockholders’
equity and our ability to raise capital on terms acceptable to us in the future.
The
price of our common stock has been volatile, and the market price of our common stock may decrease.
The
per share price of our common stock has been volatile. Since January 1, 2017 the per share closing price of our common stock has
been as low as $0.180 on July 6, 2018 and as high as $32.90 on October 11, 2017. The factors that may cause the market price of
our common stock to fluctuate include, but are not limited to:
|
|
●
|
our
ability to derive financial benefits from our ownership stake in MoviePass;
|
|
|
●
|
the
ability of MoviePass to become cash flow positive or profitable;
|
|
|
●
|
the
ability of MoviePass Ventures to enter into economic arrangements with film distributors and derive economic benefits from
such arrangements;
|
|
|
●
|
our
ability to recruit and retain qualified IT personnel;
|
|
|
●
|
changes
in the perception of investors and securities analysts regarding the risks to our business or the condition of our business;
|
|
|
●
|
changes
in our relationships with key clients;
|
|
|
●
|
changes
in the market valuation or earnings of our competitors or companies viewed as similar to us;
|
|
|
●
|
changes
in key personnel;
|
|
|
●
|
changes
in our capital structure, such as future issuances of securities or the incurrence of debt;
|
|
|
●
|
the
granting or exercise of employee stock options or other equity awards; and
|
|
|
●
|
general
market and economic conditions.
|
In
addition, the equity markets have experienced significant price and volume fluctuations that have affected the market prices for
the securities of technology companies for a number of reasons, including reasons that may be unrelated to our business or operating
performance. These broad market fluctuations may result in a material decline in the market price of our common stock and you
may not be able to sell your shares at prices you deem acceptable. In the past, following periods of volatility in the equity
markets, securities class action lawsuits have been instituted against public companies. Such litigation, if instituted against
us, could result in substantial cost and the diversion of management attention.
You
will experience immediate and substantial dilution in the book value per share of the common stock you purchase.
Because
the price per share of our common stock being offered will be higher than the book value per share of our common stock, you will
suffer substantial dilution in the net tangible book value of the securities you purchase in this offering. See the section titled
“Dilution” below for a more detailed discussion of the dilution you will incur if you purchase common stock in this
offering.
There
is no public market for the Warrants to purchase shares of our common stock being offered in this offering.
There
is no public trading market for the Warrants being offered in this offering, and we do not expect a market to develop. In addition,
we do not intend to apply to list the Warrants on any national securities exchange or other nationally recognized trading system,
including The Nasdaq Capital Market. Without an active market, the liquidity of the Warrants will be limited, and you may not
be able to resell your Warrants. If your Warrants cannot be resold, you will have to depend upon any appreciation in the value
of our common stock over the exercise price of the Warrants in order to realize a return on your investment in the Warrants.
If
stockholders do not approve an amendment to our certificate of incorporation to increase our authorized common stock or to effect
a reverse stock split, the Series A-3 Warrants will not be exercisable.
The
Series A-3 Warrants will not be exercisable until stockholders approve an amendment to our certificate of incorporation to increase
our authorized common stock or to effect a reverse stock split. Although we have filed with the SEC a proxy statement for the
Special Meeting which includes proposals to increase our authorized common stock and to effect a reverse stock split, there can
be no assurance that these proposals will be approved. If either the increase in authorized shares of common stock or reverse
stock split proposal is not approved at the Special Meeting, the Series A-3 Warrants will not be exercisable until stockholders
approve one of these proposals at a future meeting.
Except
as otherwise provided in the Warrants, holders of our Warrants will not have the rights or privileges of a holder of our common
stock, including any voting rights, until such holders exercise their Warrants and acquire our common stock.
Except
as otherwise provided in the Warrants, holders of our Warrants will not have the rights or privileges of a holder of our common
stock, including any voting rights, until such holders exercise their Warrants and acquire our common stock. As a result, absent
exercise of the Warrants, holders of the Warrants will not have the ability to vote their shares underlying the Warrants, which
may limit the influence that investors in our offering may have over the outcome of matters submitted to our stockholders for
a vote.
Because
our management will have broad discretion and flexibility in how the net proceeds from this offering are used, we may use the
net proceeds in ways in which you disagree.
We
currently intend to use the net proceeds from this offering for general corporate purposes of the Company and its subsidiaries;
to satisfy a portion or all of the amounts payable in connection with the convertible notes issued on November 7, 2017, January
23, 2018, and June 26, 2018 to the extent that they remain outstanding; and for transaction expenses including underwriter compensation.
We have not allocated specific amounts of the net proceeds from this offering for any of the foregoing purposes other than transaction
expenses. Accordingly, our management will have significant discretion and flexibility in applying the net proceeds of this offering.
You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the
opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. It is possible
that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us. The failure of our management
to use such funds effectively could have a material adverse effect on our business, financial condition, operating results and
cash flow.
This
offering is being conducted on a “best efforts” basis.
The
underwriters are offering the Series A-3 Units and Series B-3 Units on a “best efforts” basis, and the underwriters
are under no obligation to purchase any Series A-3 Units or Series B-3 Units for their own account. The underwriters are not required
to sell any specific number or dollar amount of securities in this offering but will use their best efforts to sell the securities
offered in this prospectus supplement. As a “best efforts” offering, there can be no assurance that the offering contemplated
hereby will ultimately be consummated.
USE
OF PROCEEDS
We
estimate the net proceeds to us from the sale of the Units offered hereby, after deducting the underwriting discounts and commissions
and estimated offering expenses payable by us, will be approximately $
million.
We
may use the net proceeds from the sale of Units offered by us under this prospectus for general corporate purposes of the Company
and its subsidiaries and transaction expenses.
Palladium
Capital Advisors, LLC acted as a financial advisor to the Company in connection with the offering and will receive a financial
advisory fee of $ from the proceeds.
In
order to fund our operations for the foreseeable future, we will require additional capital exceeding our cash on hand even after
giving effect to the net proceeds from this offering. In addition, actual costs and expenditures may exceed management's current
expectations. It is unlikely that we will generate sufficient operating cash flow to meet our business objectives. Accordingly,
we will need to raise additional capital in the future over and above the net proceeds from this offering.
The
amounts and timing of our actual expenditures will depend on numerous factors, including the factors described under “Risk
Factors” in this prospectus supplement, the accompanying prospectus and in the documents incorporated by reference herein,
as well as the amount of cash used in our operations. We may find it necessary or advisable to use the net proceeds for other
purposes, and our management will have significant flexibility in applying the net proceeds of this offering. Until the funds
are used as described above, we intend to invest the net proceeds from this offering in short-term, interest-bearing instruments
or other investment-grade securities.
MARKET
PRICE OF OUR COMMON STOCK
Our
common stock is listed on the Nasdaq Capital Market under the symbol “HMNY”.
The
following table sets forth the quarterly range of high and low sale prices of our common stock since January 1, 2016 as reported
by Nasdaq. As of July 6, 2018, we had 268,741,344 shares of common stock outstanding and approximately 27 stockholders of record.
|
|
|
High
|
|
|
Low
|
|
|
2018
|
|
|
|
|
|
|
|
July 1, 2018 through July
10, 2018
|
|
$
|
0.22
|
|
|
$
|
0.180
|
|
|
April 1, 2018 through June 30, 2018
|
|
$
|
4.21
|
|
|
$
|
0.21
|
|
|
January 1, 2018 through March 31, 2018
|
|
$
|
10.65
|
|
|
$
|
2.78
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
October 1, 2017 through December 31,
2017
|
|
$
|
38.86
|
|
|
$
|
5.31
|
|
|
July 1, 2017 through September 30, 2017
|
|
$
|
12.69
|
|
|
$
|
2.41
|
|
|
April 1, 2017 through June 30, 2017
|
|
$
|
3.81
|
|
|
$
|
2.23
|
|
|
January 1, 2017 through March 31, 2017
|
|
$
|
4.35
|
|
|
$
|
2.45
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
October 1, 2016 through December 31,
2016
|
|
$
|
9.90
|
|
|
$
|
3.30
|
|
|
July 1, 2016 through September 30, 2016
|
|
$
|
13.70
|
|
|
$
|
7.12
|
|
During
the years 2017 and 2016, we did not declare any dividends. We last declared a dividend of $0.08 per share to stockholders of record
on February 18, 2014. The payment of dividends is at the discretion of our Board of Directors, who review many factors, including
but not limited to profitability expectations, liquidity and financing needs, before making a determination that dividends will
be paid. There is no guarantee that our Board of Directors will declare dividends in the future.
CAPITALIZATION
The
following table sets forth our capitalization as of March 31, 2018:
|
|
●
|
on
a pro forma as adjusted basis to give effect to our receipt of net proceeds of approximately
$27.5 million from the sale of Series A-2 Units and Series B-2 Units on April 23, 2018
(the “April 2018 Offering”) after deducting underwriting discounts and commissions
and offering expenses payable by us; and
|
|
|
●
|
on
a pro forma, as adjusted basis to give effect to our receipt of net proceeds of approximately
$ million from the sale of Series A-3
Units and Series B-3 Units that we are offering after deducting underwriting discounts
and commissions and estimated offering expenses payable by us.
|
This
capitalization table should be read in conjunction with management’s discussion and analysis of results of operations and
our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December
31, 2017 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.
|
|
|
As
of March 31, 2018
|
|
|
|
|
(Unaudited)
|
|
|
|
|
Actual
|
|
|
Pro
forma (as adjusted for the April 2018 Offering)(1)
|
|
|
Pro
forma
(as adjusted for this
offering)(2)(5)
|
|
|
Cash
and cash equivalents
|
|
$
|
42,520,518
|
|
|
$
|
70,057,268
|
|
|
$
|
|
|
|
Preferred
stock, $0.01 par value; 2,000,000 shares authorized; no shares issued and outstanding, actual and as adjusted, as of March
31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, $0.01 par value; 500,000,000 shares authorized; 49,613,144 issued and outstanding actual, and, and, issued
and outstanding, as adjusted, as of March 31, 2018
(3)(4)
|
|
$
|
496,131
|
|
|
$
|
606,131
|
|
|
$
|
|
|
|
Additional
paid-in-capital
|
|
|
180,415,969
|
|
|
|
207.842,719
|
|
|
|
|
|
|
Accumulated
deficit
|
|
|
(184,319,310
|
)
|
|
|
(184,319,310
|
)
|
|
|
(184,319,310
|
)
|
|
Accumulated
other comprehensive loss – foreign currency translation
|
|
|
(111,130
|
)
|
|
|
(111,130
|
)
|
|
|
(111,130
|
)
|
|
Non
controlling interest
|
|
|
750,264
|
|
|
|
750,264
|
|
|
|
750,264
|
|
|
Total
stockholders’ equity (deficit)
|
|
$
|
(2,768,076
|
)
|
|
$
|
24,768,674
|
|
|
$
|
|
|
|
|
(1)
|
Includes
receipt of an aggregate of $500 upon the exercise of all of the pre-funded Series B-2
Warrants sold in the April 2018 Offering.
|
|
|
(2)
|
Assumes
receipt of an aggregate of $ upon
the exercise of all of the pre-funded Series B-3 Warrants sold in this offering. Cash
reflects the net proceeds from this offering, but does not include any proceeds from
the April 2018 offering.
|
|
|
(3)
|
The
number of, as adjusted, issued and outstanding shares includes the issuance of 500,000
shares of common stock issued upon exercise of the pre-funded Series B-2 Warrants sold
in the April 2018 Offering.
|
|
|
(4)
|
The
number of, as adjusted, issued and outstanding shares assumes the issuance of shares
of common stock issuable upon exercise of the pre-funded Series B-3 Warrants sold in
this offering.
|
|
|
(5)
|
Cash
does not include the effects of results of operations from April 1, 2018 through the
date of this offering.
|
The
total number of shares of common stock to be outstanding immediately after this offering assumes no exercise of the Series A-3
Warrants in this offering, includes the full exercise of the April 2018 pre-funded Series B-2 Warrants and pre-funded Series B-3
Warrants included in this offering, and is based on 49,613,144 shares of common stock issued and outstanding as of March 31, 2018,
but does not include the following:
|
|
●
|
219,136,533
shares of common stock issued subsequent to March 31, 2018 for the acquisition of MovieFone,
exercise and exchange of warrants, conversion of notes payable and consultant and employee
stock compensation and offerings of equity securities;
|
|
|
●
|
2,610,000 shares of common stock available and reserved for issuance pursuant to the Helios and Matheson Analytics Inc. 2014 Equity Incentive Plan;
|
|
|
●
|
7,050,399 shares of common stock that may be issued upon the exercise of warrants by Palladium Capital Advisors LLC;
|
|
|
●
|
4,636,355 shares of common stock reserved for issuance to various officers, directors, employees and consultants;
|
|
|
●
|
4,000,001 shares of
common stock issuable to MoviePass upon receipt of stockholder approval and conversion of the convertible promissory note in
the principal amount of $12 million that we issued to MoviePass upon the closing of the Securities Purchase Agreement, dated
August 15, 2017, between the Company and MoviePass;
|
|
|
●
|
207,977,504 shares of common stock issuable upon the conversion of restricted and unrestricted principal and related interest and make-whole payments under the convertible debt for which the majority of the amount owed to us under the applicable investor notes has not yet been paid to the Company. Such restricted principal amount may not, as of the date of this prospectus supplement, be converted into any shares of common stock;
|
|
|
●
|
12,721,500 shares of common stock issuable upon the exercise of warrants issued in public offerings in December 2017, February 2018 and April 2018;
|
|
|
●
|
2,550,154 shares of common stock issuable upon the exercise of warrants, issued to Oath upon the closing of the Moviefone Acquisition;
|
|
|
●
|
500,000 shares reserved for issuance to Helios and Matheson Information Technology Ltd. in exchange for entering into prior lockup agreements and a new 12-month lockup agreement;
|
|
|
●
|
Approximately $92.8 million of common stock that may be issued in our outstanding “at-the-market” offering (the “ATM Offering”); and
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|
|
|
|
|
|
●
|
164,000,000 shares issuable upon conversion of the convertible notes we issued in June 2018, upon receipt of stockholder approval.
|
DILUTION
A
purchaser of Units in this offering will be diluted immediately to the extent of the difference between the public offering price
per Unit and our pro forma net tangible book value per share after this offering. We calculate net tangible book value per share
by dividing our net tangible book value, which is tangible assets less total liabilities, by the number of outstanding shares
of our common stock.
Our
net tangible book value as of March 31, 2018 was approximately $(109.2) million, or $(2.20) per share. After giving effect to
the sale by us of 10,500,000 Series A-2 Units and 500,000 Series B-2 Units under the April 2018 Offering at the public offering
price of $2.75 per unit (which per unit price assumes the exercise of all pre-funded Series B-2 Warrants offered in the April
2018 Offering for $0.001 per share), and after deducting the underwriting discounts and commissions and estimated offering expenses
payable by us, our pro forma as adjusted net tangible book value as of March 31, 2018 would have been approximately $(81.6) million,
or $(1.35) per share.
After
giving effect to the sale by us of Series A-3 Units and
Series B-3 Units at the public offering price of $ per
Unit (which per Unit price assumes the exercise of all pre-funded Series B-3 Warrants being offered in this offering for $0.001
per share), and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, our
pro forma as adjusted net tangible book value as of March 31, 2018 would have been approximately $
million, or $ per share. This represents an immediate increase in as adjusted
net tangible book value of $ per share to existing stockholders and an immediate
dilution of $ per share to new investors of Units in this offering.
The following table illustrates the per share dilution to investors of Units in this offering:
|
Public
offering price per Unit for this offering
|
|
$
|
|
|
|
$
|
|
|
|
Historical
net tangible book value per share as of March 31, 2018
|
|
$
|
(2.20
|
)
|
|
|
|
|
|
Increase
in pro forma net tangible book value per share after the April 2018 Offering
|
|
$
|
0.85
|
|
|
|
|
|
|
Pro
forma net tangible book value per share as of March 31, 2018 after the April 2018 Offering
|
|
$
|
1.35
|
|
|
|
|
|
|
Increase
in pro forma net tangible book value per share after this offering
|
|
$
|
|
|
|
|
|
|
|
As
adjusted pro forma net tangible book value per share as of March 31, 2018, after giving effect to this offering
|
|
|
|
|
|
$
|
|
|
|
Dilution
per share to new investors
|
|
|
|
|
|
$
|
|
|
The
foregoing table does not take into account further dilution to new investors that could occur upon the exercise of outstanding
options, restricted stock units and warrants having a per share exercise price less than the per Unit offering price to the public
in this offering.
For
purposes of calculating pro forma net tangible book value, the above table is based on 49,613,144 shares of our common stock issued
and outstanding as of March 31, 2018, and does not include the shares issued or issuable as disclosed above under “Capitalization.”
DESCRIPTION
OF THE SECURITIES WE ARE OFFERING
We
are offering Series A-3 Units consisting of
one share of our common stock and one Series A-3 Warrant to purchase shares
of our common stock and Series B-3 Units
consisting of one pre-funded Series B-3 Warrant to purchase shares
of common stock and one Series A-3 Warrant to purchase
shares of our common stock, at a public offering price of $
per Unit. This prospectus supplement also includes the offering of the shares of common stock issuable upon exercise of the Warrants.
Common
Stock
The
material terms and provisions of our common stock are described under the caption “Description of the Securities that may
be Offered/Description of Common Stock” beginning on page S-20 of the accompanying prospectus, subject to the following
modification. We have 502,000,000 shares of capital stock authorized under our certificate of incorporation, consisting of 500,000,000
shares of common stock, $0.01 par value, and 2,000,000 shares of preferred stock, $0.01 par value. We have 20,500 shares of Series
A Preferred Stock outstanding. Each share of Series A Preferred Stock is entitled to 3,205 votes per share on all matters on which
holders of common stock are entitled to vote. However, the amount of votes with respect to the Series A Preferred Stock held by
any holder, when aggregated with any other voting securities of our company held by such holder, cannot exceed 19.9% of our outstanding
voting power calculated as of June 21, 2018 (or such greater percentage allowed by Nasdaq without any stockholder approval requirements).
Warrants
The
following is a brief summary of certain terms and conditions of the Warrants included in the Units we are offering and is subject
in all respects to the provisions contained in the Warrants.
Series
A-3 Warrants
Form.
The Series A-3 Warrants will be issued as individual warrant agreements issued to purchasers.
Amount.
Each purchaser of a Series A-3 Unit will receive a Series A-3 Warrant exercisable into one share of common stock for
each share of common stock included in the Series A-3 Unit.
Exercisability.
The Series A-3 Warrants will not be exercisable until stockholders approve an amendment to our certificate of incorporation
to increase our authorized common stock or to effect a reverse stock split, and will expire on the five-year anniversary of issuance.
The Series A-3 Warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed
exercise notice and, by payment in full in immediately available funds for the number of shares of common stock purchased upon
such exercise. The holder may, in its sole discretion, elect to exercise the Series A-3 Warrant through a cashless exercise if
a registration statement covering the issuance or resale of the warrant shares is not available for the issuance or resale of
such warrant shares, in which case the holder would receive upon such exercise the net number of shares of common stock determined
according to the formula set forth in the Series A-3 Warrant.
Exercise
Limitation.
A holder will not have the right to exercise any portion of the Series A-3 Warrant if the holder (together with
its affiliates and any other persons acting as a group within such holder) would beneficially own in excess of 4.99% or 9.99%,
if selected by the purchaser, of the number of shares of our common stock outstanding immediately after giving effect to the exercise,
as such percentage ownership is determined in accordance with the terms of the Series A-3 Warrants. However, any holder may increase
or decrease such percentage to any other percentage not in excess of 9.99% upon at least 61 days’ prior notice from the
holder to us.
Exercise
Price.
The exercise price per whole share of common stock purchasable upon exercise of the Series A-3 Warrants is $ per share
of common stock. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting our common stock and also upon any distributions
of assets, including cash, stock or other property to our stockholders.
Transferability.
Subject to applicable laws, the Series A-3 Warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange
Listing.
We do not plan on applying to list the Series A-3 Warrants on The Nasdaq Capital Market, any other national securities
exchange or any other nationally recognized trading system.
Adjustment.
The Series A-3 Warrants also include “full ratchet” anti-dilution protection provisions (the “Full Ratchet
Adjustment”), which provide that if we issue any shares of common stock at a price less than the then current exercise price
of the Series A-3 Warrants, or if we issue any securities convertible into, or exercisable, or exchangeable for, shares of common
stock with an exercise or conversion price less than the then current exercise price of the Series A-3 Warrants, then the exercise
price of the Series A-3 Warrants will automatically be reduced to the issuance price of the new shares of common stock or the
exercise or conversion price of the warrants, options or other convertible or exchangeable securities.
The
Full Ratchet Adjustment does not apply if we issue “Excluded Securities”, including certain (i) option and other equity
incentive awards approved by our board of directors to be issued to directors, officers, consultants and employees, (ii) shares
of common stock issued upon conversion or exercise of convertible securities that were issued before the date of this prospectus
supplement, (iii) shares issued upon conversion of the Senior Secured Bridge Convertible Notes we issued on June 26, 2018 (the
“June Notes”), (iv) shares, options, or convertible securities issued upon conversion, exercise or exchange of securities
held by certain holders of the June Notes, (v) up to 13,500,000 shares that we may issue to securities holders of MoviePass in
a merger or business combination between the Company and MoviePass, (vi) shares of common stock issued under the ATM Offering, and (vii) 500,000 shares granted by our board of directors to Helios & Matheson Information Technology
Ltd, a current stockholder of the Company, in exchange for its entry into a 12-month lock-up agreement with us.
Fundamental
Transactions.
In the event of a fundamental transaction, as described in the Series A-3 Warrants and generally including any
reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially
all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of
our outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our
outstanding common stock, the holders of the Series A-3 Warrants will be entitled to receive upon exercise of the Series A-3 Warrants
the kind and amount of securities, cash or other property that the holders would have received had they exercised the Series A-3
Warrants immediately prior to such fundamental transaction.
Rights
as a Stockholder.
Except as otherwise provided in the Series A-3 Warrants or by virtue of such holder’s ownership of
shares of our common stock, the holder of a Series A-3 Warrant does not have the rights or privileges of a holder of our common
stock, including any voting rights, until the holder exercises the Series A-3 Warrant.
Waivers
and Amendments
. The terms of a Series A-3 Warrant may be amended or waived with the written consent of the Company and the
holders of 45% of the then outstanding Series A-3 Warrants.
Fractional
Shares.
No fractional shares will be issued upon exercise of the Series A-3 Warrants. The Series A-3 Warrants do not confer
upon holders any voting or other rights as stockholders of the Company.
Series
B-3 Warrants
The
pre-funded Series B-3 Warrants will have an aggregate exercise price of $
per share of our common stock, all of which will be pre-funded except for a nominal exercise price of $0.001 per share of our
common stock, subject to adjustment. They will be immediately exercisable, and will expire on the five-year anniversary of issuance.
The holder will not have the right to exercise any portion of the Series B-3 Warrant if the holder, together with its affiliates,
would, subject to certain limited exceptions, beneficially own in excess of 9.99% of our common stock outstanding immediately
after the exercise. The Series B-3 Warrants include customary adjustment provisions that are substantially similar to the ones
contained in the Series A-3 Warrants, provided that the Series B-3 Warrants will not be subject to the Full Ratchet Adjustment.
UNDERWRITING
Canaccord
Genuity LLC is acting as the representative of the underwriters named below. We have entered into an underwriting agreement with
the representative dated as of the date of this prospectus supplement. Subject to the terms and conditions of the underwriting
agreement, we have agreed to offer and sell to the public through the underwriters, and the underwriters have agreed, severally
and not jointly, to sell up to the respective number of Series A-3 Units and Series B-3 Units shown opposite its name below at
the public offering price shown on the cover page of this prospectus supplement on a best efforts basis.
|
Underwriters
|
|
Number
of Series A-3 Units
|
|
|
Number
of Series B-3 Units
|
|
|
Canaccord
Genuity LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
This
offering is being completed on a “best efforts” basis and the underwriters have no obligation to buy any Series A-3
Units or Series B-3 Units from us or to arrange for the purchase or sale of any specific number or dollar amount of Series A-3
Units or Series B-3 Units. As a “best efforts” offering, there can be no assurance that the offering contemplated
hereby will ultimately be consummated.
Each
underwriter proposes to offer the Units directly to the public at the public offering price per Unit set forth on the cover page
of this prospectus supplement. After the offering, these figures may be changed by the underwriters.
The
securities we are offering are being offered by the underwriters subject to certain conditions specified in the underwriting agreement.
Underwriting
Discount and Expenses
The
following table shows the per Unit and total underwriting commission we will pay to the underwriters:
We
estimate that the total expenses of the offering payable by us, not including the underwriting commission, will be approximately
$ . We have agreed to reimburse the underwriters for certain of their fees and expenses, including the expenses of counsel to
the underwriters, in an amount up to $200,000 in the aggregate and to pay a financial advisory fee to Palladium Capital Advisors,
LLC of $ .
Lock-up
Agreements
Our
officers and directors and certain of our stockholders holding at least 5% of our outstanding shares of common stock, and each
of their respective affiliates and associated partners, have entered into lock-up agreements with the underwriters whereby they
agree to be subject to a lock-up period of 90 days following the date of this prospectus supplement, or are otherwise party to
existing lock-up agreements with the underwriters, us or the holders of our convertible notes. This means that, during the applicable
lock-up period, such persons may not offer for sale, contract to sell, sell, distribute, grant any option, right or warrant to
purchase, pledge, hypothecate or otherwise dispose of, directly or indirectly, any shares of our common stock or any securities
convertible into, or exercisable or exchangeable for, shares of our common stock. Certain limited transfers are permitted during
the lock-up period if the transferee agrees to these lock-up restrictions. We have also agreed, in the underwriting agreement,
to similar lock-up restrictions on the issuance and sale of our securities for 90 days following the date of this prospectus supplement,
although we will be permitted to issue stock options or stock awards to directors, officers, and employees and consultants under
our existing equity incentive plan or other stock compensation plans and other customary carve outs to be set forth in the underwriting
agreement. The Company lock-up restrictions will not apply to (i) the offer and sale of shares under the ATM Offering, (ii) shares
of common stock or any securities convertible into, or exercisable, or exchangeable for, shares of common stock, issued in connection
with future acquisitions as long as (x) the aggregate number of shares of common stock issued or issuable does not exceed 10%
of the number of shares of common stock outstanding immediately after this offering, and (y) each recipient of any such shares
or other securities agrees to restrictions on the resale of such securities that are consistent with the lock-up agreements described
above, and (iii) shares of common stock or any securities convertible into, or exercisable, or exchangeable for, shares of common
stock, issued in connection with any acquisition of, or business combination with, MoviePass Inc. Canaccord Genuity LLC, as the
representative of the underwriters, may, in its sole discretion and without notice, waive the terms of any of these lock-up agreements.
Listing;
Transfer Agent and Registrar
Our
common stock is listed on the Nasdaq Capital Market under the symbol “HMNY”. We do not intend to list the Warrants
to be sold in this offering on any securities exchange.
The
transfer agent for our common stock is Computershare. Our transfer agent’s address is 350 Indiana Street, Suite 750, Golden,
Colorado 80401.
Stabilization,
Short Positions and Penalty Bids
The
underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock. Specifically,
the underwriters may sell more shares of common stock than they are obligated to purchase under the underwriting agreement, creating
a short position. The underwriters must close out any short position by purchasing shares of common stock in the open market.
A short position may be created if the underwriters are concerned that there may be downward pressure on the price of the common
stock in the open market after pricing that could adversely affect investors who purchased in this offering. As an additional
means of facilitating this offering, the underwriters may bid for, and purchase, shares of our common stock in the open market
to stabilize the price of the common stock. These activities may raise or maintain the market price of our common stock above
independent market levels or prevent or slow a decline in the market price of our common stock. The underwriters are not required
to engage in these activities, and may end any of these activities at any time.
Electronic
Delivery of Prospectus Supplements
A
prospectus supplement in electronic format may be delivered to potential investors by the underwriters participating in this offering.
The prospectus supplement in electronic format will be identical to the paper version of such prospectus supplement. Other than
the prospectus supplement in electronic format, the information on any underwriter’s web site and any information contained
in any other web site maintained by any underwriter is not part of the prospectus supplement or the registration statement of
which this prospectus supplement forms a part.
Indemnification
We
have agreed to indemnify the underwriters against certain liabilities, including certain liabilities arising under the Securities
Act, or to contribute to payments that the underwriters may be required to make for these liabilities.
Other
Transactions
From
time to time in the ordinary course of its businesses, the underwriters and certain of their affiliates have engaged, and may
in the future engage, in commercial banking or investment banking transactions with us and our affiliates for which they have
received, or in the future may receive, customary fees. We entered into an Equity Distribution Agreement with Canaccord Genuity
LLC on April 18, 2018, for the sale of up to $150.0 million of our shares of common stock through Canaccord Genuity LLC, acting
as our sales agent. Accordingly, Canaccord Genuity LLC may in the future receive customary fees and commissions for these transactions.
Offer
Restrictions Outside the United States
Other
than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities
offered by this prospectus supplement in any jurisdiction where action for that purpose is required. The securities offered by
this prospectus supplement may not be offered or sold, directly or indirectly, nor may this prospectus supplement or any other
offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in
any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that
jurisdiction. Persons into whose possession this prospectus supplement comes are advised to inform themselves about and to observe
any restrictions relating to the offering and the distribution of this prospectus supplement. This prospectus supplement does
not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus supplement in any
jurisdiction in which such an offer or a solicitation is unlawful.
LEGAL
MATTERS
The
validity of the issuance of the securities offered hereby will be passed upon for us by Greenberg Traurig, LLP, Los Angeles, California.
The underwriters are being represented in connection with this offering by Goodwin Procter LLP, New York, New York.
EXPERTS
Rosenberg
Rich Baker Berman, P.A., independent registered public accounting firm, has audited our consolidated financial statements
included in our Annual Report on Form 10-K for the years ended December 31, 2017 and 2016, as set forth in their report, which
is incorporated by reference in this prospectus supplement and elsewhere in the registration statement in which this prospectus
supplement is included, which report includes an explanatory paragraph about the existence of substantial doubt concerning our
ability to continue as a going concern. Our consolidated financial statements for the years ended December 31, 2017 and 2016 are
incorporated by reference in reliance on Rosenberg Rich Baker Berman, P.A.’s report, given on their authority as
experts in accounting and auditing.
The
balance sheet of Zone Technologies, Inc. as of December 31, 2015, and the related statements of operations, stockholders’
deficit, and cash flows for the period then ended, have been audited by EisnerAmper LLP, independent registered public accounting
firm, as stated in their report which is incorporated by reference from the Company’s Form 8-K/A, Amendment No. 1, filed
with the Securities and Exchange Commission on September 20, 2016, which report includes an explanatory paragraph about the existence
of substantial doubt concerning Zone Technologies, Inc.’s ability to continue as a going concern. Such financial statements
have been incorporated herein by reference in reliance on the report of such firm given upon their authority as experts in accounting
and auditing.
The
balance sheets of MoviePass Inc. as of December 31, 2016 and 2015, and the related statements of operations, stockholders’
equity, and cash flows for each of the years then ended, have been audited by EisnerAmper LLP, independent registered public accounting
firm, as stated in their report which is incorporated by reference from the Company’s Form 8-K filed with the Securities
and Exchange Commission on November 30, 2017 which report includes an explanatory paragraph about the existence of substantial
doubt concerning MoviePass Inc.’s ability to continue as a going concern. Such financial statements have been incorporated
herein by reference in reliance on the report of such firm given upon their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form S-3 under the Securities Act, with respect to the securities covered
by this prospectus supplement. This prospectus supplement, which is a part of the registration statement, does not contain all
of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information
with respect to us and the securities covered by this prospectus supplement, please see the registration statement and the exhibits
filed with the registration statement. A copy of the registration statement and the exhibits filed with the registration statement
may be inspected without charge at the Public Reference Room maintained by the SEC, located at 100 F Street, N.E., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. The SEC
also maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the website is
http://www.sec.gov
.
We
are subject to the information and periodic reporting requirements of the Exchange Act and, in accordance therewith, we file periodic
reports, proxy statements and other information with the SEC. Such periodic reports, proxy statements and other information are
available for inspection and copying at the Public Reference Room and website of the SEC referred to above. We maintain a website
at
http://www.hmny.com
. You may access our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and amendments to those reports filed pursuant to Sections 13(a) or 15(d) of the Exchange Act with the SEC free of
charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the
SEC. Our website and the information contained on that site, or connected to that site, are not incorporated into and are not
a part of this prospectus supplement.
INFORMATION
INCORPORATED BY REFERENCE
The
SEC and applicable law permits us to “incorporate by reference” into this prospectus supplement information that we
have or may in the future file with or furnish to the SEC. This means that we can disclose important information by referring
you to those documents. You should read carefully the information incorporated herein by reference because it is an important
part of this prospectus supplement. We hereby incorporate by reference the following documents into this prospectus supplement:
|
|
●
|
our Annual Report on Form 10-K for the fiscal
year ended December 31, 2017, as filed with the Securities and Exchange Commission on April 17, 2018;
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●
|
our Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2018, as filed with the Securities and Exchange Commission on May 15, 2018;
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|
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|
|
|
●
|
our Current Reports on Form 8-K filed with the
Securities and Exchange Commission on January 9, 2018, January 11, 2018, January 19, 2018, January 26, 2018, February 8,
2018, February 13, 2018, March 14, 2018, March 15, 2018, April 5, 2018, April 18, 2018, April 19, 2018, April 20, 2018,
May 8, 2018, June 4, 2018, June 21, 2018, June 26, 2018, and June 29, 2018 and our Current Report on Form 8-K/A filed
with the Securities and Exchange Commission on February 9, 2018;
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|
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|
|
|
●
|
the financial statements of Zone Technologies,
Inc. for the period ended December 31, 2015 and the interim period ended June 30, 2016 included in our Current Report on Form
8-K/A filed with the Securities and Exchange Commission on September 20, 2016;
|
|
|
|
|
|
|
●
|
the financial statements of MoviePass Inc. for
the year ended December 31, 2016 and the interim period ended September 30, 2017 included in our Current Report on Form 8-K
filed with the Securities and Exchange Commission on November 30, 2017; and
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|
|
|
|
|
|
●
|
the unaudited pro forma condensed combined statements
of operations for the year ended December 31, 2017 and the quarter ended March 31, 2018 included in the Registration Statement
on Form S-3 under the heading “Unaudited Pro Forma Financial Information” filed with the Securities and Exchange
Commission on July 2, 2018.
|
Additionally,
all documents filed by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than any portions of
filings that are furnished rather than filed pursuant to Items 2.02 and 7.01 of a Current Report on Form 8-K), after the date
of this prospectus supplement and before the termination or completion of this offering shall be deemed to be incorporated by
reference into this prospectus supplement from the respective dates of filing of such documents. Any information that we subsequently
file with the SEC that is incorporated by reference as described above will automatically update and supersede any previous information
that is part of this prospectus supplement.
Upon
written or oral request, we will provide you without charge, a copy of any or all of the documents incorporated by reference,
other than exhibits to those documents unless the exhibits are specifically incorporated by reference in the documents. Please
send requests to Helios and Matheson Analytics Inc., Attn: Chief Executive Officer, The Empire State Building, 350 Fifth Avenue,
New York, New York 10118, telephone number is (212) 979-8228.
PROSPECTUS
$400,000,000
Common
Stock
Preferred
Stock
Warrants
Units
Subscription
Rights
We
may from time to time offer and sell, in one or more offerings, up to $400,000,000 in any combination of common stock, preferred
stock, warrants, units and subscription rights. This prospectus provides you with a general description of the securities we may
offer and certain other information about our company. We may offer these securities in amounts, at prices and on terms determined
at the time of offering.
We
will provide you the specific terms of these offerings and securities in one or more supplements to this prospectus. We may also
authorize one or more free-writing prospectuses to be provided to you in connection with these offerings. Any prospectus supplement
and any related free-writing prospectus may also add, update or change information contained in this prospectus. You should carefully
read this prospectus, any applicable prospectus supplement and any related free-writing prospectus, as well as any documents incorporated
by reference, before you invest.
We
may offer these securities from time to time in amounts, at prices and on other terms to be determined at the time of the offering.
We may offer and sell these securities to or through underwriters, dealers or agents, or directly to investors, on a continuous
or delayed basis. The supplements to this prospectus will provide the specific terms of the plan of distribution. The price to
the public of such securities and the net proceeds we expect to receive from such sale will also be set forth in a prospectus
supplement.
Our
common stock is listed on the Nasdaq Capital Market under the symbol “HMNY.” On January 24, 2018, the closing price
of our common stock as reported by the Nasdaq Capital Market was $9.15 per share.
An
investment in our common stock involves a high degree of risk. See “Risk Factors” on page 7 of this prospectus for
more information on these risks. We may include additional risk factors in an applicable prospectus supplement under the heading
“Risk Factors.” You should review that section of the prospectus supplement for a discussion of matters that investors
in our securities should consider.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or
passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this prospectus is February 9, 2018.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement filed with the Securities and Exchange Commission (the “SEC”) using
a “shelf” registration process. Under this shelf registration process, we may offer to sell any combination of the
securities described in this prospectus in one or more offerings for an aggregate offering price of up to $400,000,000. This prospectus
provides you with a general description of the securities which may be offered. Each time we offer securities for sale, we will
provide a prospectus supplement that contains specific information about the terms of that offering. Any prospectus supplement
may also add or update information contained in this prospectus. You should read both this prospectus and any prospectus supplement,
including all documents incorporated herein or therein by reference, together with additional information described below under
“Where You Can Find More Information” and “Information Incorporated by Reference”.
The
registration statement that contains this prospectus (including the exhibits thereto) contains additional important information
about us and the securities we may offer under this prospectus. Specifically, we have filed certain legal documents that establish
the terms of the securities offered by this prospectus as exhibits to the registration statement. We will file certain other legal
documents that establish the terms of the securities offered by this prospectus as exhibits to reports we file with the SEC. You
may obtain copies of that registration statement and the other reports and documents referenced herein as described below under
the heading “Where You Can Find More Information”.
You
should rely only on the information contained or incorporated by reference in this prospectus and in any prospectus supplement.
We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not making offers to sell or solicitations to buy the securities in any jurisdiction
in which an offer or solicitation is not authorized or in which the person making that offer or solicitation is not qualified
to do so or to anyone to whom it is unlawful to make an offer or solicitation. You should not assume that the information in this
prospectus or any prospectus supplement, as well as the information we file or previously filed with the SEC that we incorporate
by reference in this prospectus or any prospectus supplement, is accurate as of any date other than its respective date. Our business,
financial condition, results of operations and prospects may have changed since those dates.
In
this prospectus, unless the context otherwise requires, references to “we,” “us,” “our,” “our
company”, “the Company” or “Helios” refer to Helios and Matheson Analytics Inc. and its subsidiaries.
MARKET,
INDUSTRY AND OTHER DATA
This
prospectus, including the information incorporated by reference, contains estimates, projections and other information concerning
our industry, our business, and the markets for certain products and services, including data regarding the estimated size of
those markets and their projected growth rates. Information that is based on estimates, forecasts, projections or similar methodologies
is based on a number of assumptions and is inherently subject to uncertainties, including those described in “Risk Factors”
and elsewhere in this prospectus and documents incorporated by reference in this prospectus, and actual events or circumstances
may differ materially from events and circumstances reflected in this information. You are cautioned not to give undue weight
to such estimates, projections and other information.
Unless
otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies
and similar data prepared by third parties and general publications. In some cases, we do not expressly refer to the sources from
which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should
assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly
stated or the context otherwise requires.
DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and any accompanying prospectus supplement, including the documents that we incorporate by reference, may contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Forward-looking
statements in this prospectus and any accompanying prospectus supplement include, without limitation, statements related to our
plans, strategies, objectives, expectations, intentions and adequacy of resources. Investors are cautioned that such forward-looking
statements involve risks and uncertainties including, without limitation, the following: (i) our plans, strategies, objectives,
expectations and intentions are subject to change at any time at our discretion; (ii) our plans and results of operations will
be affected by our ability to manage competition; and (iii) other risks and uncertainties indicated from time to time in our filings
with the SEC. Important factors that could cause actual results to differ materially from those indicated in the forward-looking
statements include, but are not limited to,
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the
ability of MoviePass Inc. (“MoviePass”) to successfully develop its MoviePass business model;
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our
capital requirements and whether or not we will be able to raise capital when we need it;
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changes
in local, state or federal regulations that will adversely affect our business;
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our
ability to retain our existing clients and market and sell our services to new clients;
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whether
we will continue to receive the services of certain officers and directors;
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our
ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights
of others;
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our
ability to effectively react to other risks and uncertainties described from time to time in our SEC filings, such as fluctuation
of quarterly financial results, reliance on third party consultants, litigation or other proceedings and stock price volatility;
and
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other
uncertainties, all of which are difficult to predict and many of which are beyond our control.
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In
some cases, you can identify forward-looking statements by terminology such as ‘‘may,’’ ‘‘will,’’
‘‘should,’’ ‘‘could,’’ ‘‘expects,’’ ‘‘plans,’’
‘‘intends,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’
‘‘predicts,’’ ‘‘potential,’’ or ‘‘continue’’ or the negative
of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation
to publicly update or review any forward-looking statement.
OUR
BUSINESS
This
is only a summary and may not contain all the information that is important to you. You should carefully read both this prospectus
and any accompanying prospectus supplement and any other offering materials, together with the additional information described
under the heading “Where You Can Find More Information”.
About
Helios and Matheson Analytics Inc.
Overview
We
provide information technology services and solutions including a range of technology platforms focusing on big data, artificial
intelligence, business intelligence, social listening, and consumer-centric technology. More recently, to provide greater value
to our stockholders, we have sought to expand our business primarily through acquisitions that leverage our capabilities and expertise.
On
November 9, 2016, we acquired Zone Technologies, Inc. (“Zone”), a state-of-the-art mapping and spatial analysis company,
and on December 11, 2017 we acquired a majority interest in MoviePass, the nation’s premier movie theater subscription service.
MoviePass
MoviePass
was incorporated in Delaware in 2011 and is a movie theater subscription service that allows members to see a new movie every
day in theaters nationwide for a monthly price of $9.95. Once they sign up for the MoviePass service online, subscribers are prompted
to download the MoviePass application on their smart phones and are then mailed a MoviePass debit card. The MoviePass application
shows subscribers the show times of all the movies that are currently showing at their local movie theaters. Once they have received
their MoviePass debit card, subscribers can use the debit card to purchase up to one movie ticket per day at any of the movie
theaters listed in the MoviePass application without paying any additional costs. During the four months after MoviePass’
announcement of its $9.95 monthly subscription plan in August 2017, MoviePass grew to over 1,000,000 total subscribers including
those on either its monthly or annual plans. This represents strong growth when compared to other subscription-based companies,
such as Spotify, Hulu, ClassPass and Netflix, which achieved 1,000,000 subscribers in over 5, 10, 17 and 39 months, respectively,
estimated based on information available publicly from various news and other sources. MoviePass surpassed 1,500,000 subscribers
in January 2018.
MoviePass
is led by Mitch Lowe, its Chief Executive Officer, Stacy Spikes, its co-founder and Chief Operating Officer, Sanjay Puri, its
Chief Strategy Officer, and Chris Kelly, its Chairman. The Company intends to strengthen our management team and combine its data
and artificial intelligence technology with MoviePass’ technology. With our big data and artificial intelligence platforms
and other technologies that we own, we believe we will be able to bring a significant technological advantage to MoviePass.
MoviePass
Market Opportunity
Movie
going is embedded in American society and enjoyed by people of all races, ages and socio-economic levels. As noted below, the
2016 Theatrical Market Statistics Report issued by the Motion Picture Association of America reports an annual average of 246
million movie goers in North America spending $11.4 billion on tickets annually. MoviePass intends to encourage increased attendance
at movie theaters with the subscription model by targeting the casual movie goer (those who attend less than once a month) who
represent 85% of the total movie going market. MoviePass conducted a study in two test markets using data on movie goers before
subscribing to MoviePass and data for movie goers in the first year after having MoviePass. The results from the study demonstrate
that MoviePass drove a 100% and 123% lift in movie attendance in each of these markets.
Source:
Motion Picture Association of America 2016 Theatrical Market Statistics Report and Company Management.
MoviePass
Competition
The
market for filmed entertainment ticketing services is intensely competitive and subject to rapid change. MoviePass’ potential
competitors include Atom Tickets, MovieTickets.com, Fandango, AMC Entertainment Holdings Inc.’s AMC Stubs program, Regal
Entertainment Group’s Regal Crown Club and Cinemark Holdings, Inc.’s Movie Club, as well as other potential exhibitors
offering their own subscription services or loyalty programs.
AMC
Stubs is a loyalty program offered by AMC Entertainment Holdings Inc. with approximately 10.8 million household members. Movie
goers can join the loyalty program as either a basic member for free or a premiere member for $15. The basic membership offers
free popcorn refills, up to a $2 discount on tickets on Tuesdays, $5 rewards for every 5,000 points (points are earned at a rate
of 20 points for every $1 spent), waived online ticket fees and free popcorn on the member’s birthday. Premiere members
receive a $5 discount on tickets on Tuesdays, earn 100 points for every $1 spent and all the other benefits that come with the
basic membership.
Regal
Entertainment Group also offers a loyalty program with approximately 14 million active members called the Regal Crown Club. The
program only has one membership option and is free to join. Regal Crown Club members earn credits for every $1 they spend on movie
tickets and at concession stands. Points can be redeemed for rewards via the use of a physical card or a virtual card with Regal’s
mobile app. Rewards include free concession items, merchandise, movie tickets and more.
On
December 5, 2017, Cinemark Holdings Inc. launched Movie Club. Movie Club is a monthly subscription plan that allows subscribers
to buy one movie ticket a month for a discounted price of $8.99. Members of Movie Club can roll over unused tickets from month
to month and receive a 20% discount on items bought at concession stands. Movie Club membership is only valid at Cinemark theaters.
Many
of these competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater
financial, marketing and other resources than MoviePass does. Some of these competitors have adopted, and may continue to adopt,
aggressive pricing policies and devote substantially more resources to marketing and website and systems development than MoviePass
does. In addition, MoviePass’ competitors may form or extend strategic alliances with studios, exhibitors and distributors
that could affect adversely MoviePass’ ability to compete on favorable terms.
MoviePass
Intellectual Property
MoviePass
uses a combination of trademark, copyright and trade secret laws and confidentiality agreements to protect its proprietary intellectual
property. MoviePass has a registered trademark for the MoviePass name. MoviePass owns U.S. Patent Nos. 8,484,133, 8,612,235, and
9,135,578. MoviePass has filed applications for additional trademarks and patents. MoviePass’ outstanding trademark and
patent applications may not be allowed. Competitors may challenge successfully the validity and scope of MoviePass’ patents
and trademark(s). MoviePass’ trademark(s), trademark applications, patents, and patent applications may not provide MoviePass
with a competitive advantage. To date, MoviePass has relied primarily on proprietary processes and know-how to protect its intellectual
property related to its Web site, mobile application and fulfillment processes.
From
time to time, MoviePass may encounter disputes over rights and obligations concerning intellectual property. MoviePass believes
that its service offering does not infringe the intellectual property rights of any third party. However, it cannot assure you
that MoviePass will prevail in any intellectual property dispute.
MoviePass/Fandor/Costco
Subscription Offer
On
December 12, 2017, MoviePass and Fandor, the streaming service with the largest collection of independent films, documentaries,
international features and shorts; announced that both companies have partnered with Costco Wholesale Corporation (“Costco”)
to offer a one-year subscription plan for a flat fee of $89.99. The subscription plan for both services was made available exclusively
to Costco members for a limited time and covers a year of membership for both MoviePass and Fandor. The subscription plan was
recently extended through February 2018.
Corporate
Information
Our
executive offices are located at The Empire State Building, 350 Fifth Avenue, New York, New York 10118, and our telephone number
is (212) 979-8228. Additional information about us is available on our website at www.hmny.com. The information contained on or
that may be obtained from our website is not, and shall not be deemed to be, a part of this prospectus. Our common stock, par
value $0.01 per share, is currently traded on the Nasdaq Capital Market under the ticker symbol “HMNY”.
For
a description of our business, financial condition, results of operations and other important information regarding us, we refer
you to our filings with the SEC incorporated by reference in this prospectus. For instructions on how to find copies of these
documents, see “
Where You Can Find More Information
.”
RISK
FACTORS
Investing
in our securities involves a high degree of risk. Please see the risk factors set forth in Part I, Item 1A of our most recent
Annual Report on Form 10-K and Part II, Item 1A of our most recent Quarterly Report on Form 10-Q and other filings we make with
the SEC, which are incorporated by reference in this prospectus. Additional risk factors may be included in a prospectus supplement
relating to a particular offering of securities. Before making an investment decision, you should carefully consider these risks
as well as other information we include or incorporate by reference in this prospectus. The risks and uncertainties we have described
are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial
may also affect our business operations. These risks could materially affect our business, results of operations or financial
condition and cause the value of our securities to decline.
USE
OF PROCEEDS
Unless
we state otherwise in an accompanying prospectus supplement, we intend to use the net proceeds from the sale of the securities
offered by us under this prospectus and any related prospectus supplement for general corporate purposes of Helios and its subsidiaries
and/or to support MoviePass operations. These purposes may include capital expenditures and additions to working capital. When
a particular series of securities is offered, the prospectus supplement relating to that series will set forth our intended use
for the net proceeds we receive from the sale of the securities. Pending the application of the net proceeds, we may invest the
proceeds in short-term, interest-bearing instruments or other investment-grade securities.
DILUTION
We
will set forth in a prospectus supplement the following information regarding any material dilution of the equity interests of
investors purchasing securities sold by the Company in an offering under this prospectus:
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the net tangible
book value per share of our equity securities before and after the offering;
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the amount of the
increase in such net tangible book value per share attributable to the cash payments made by purchases in the offering; and
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the amount of the
immediate dilution from the public offering price which will be absorbed by such purchasers.
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DESCRIPTION
OF THE SECURITIES THAT MAY BE OFFERED
Description
of Common Stock
The
following summary of the rights of our common stock is not complete and is subject to and qualified in its entirety by reference
to our certificate of incorporation and bylaws, copies of which are included as exhibits to our registration statement on Form
S-3, of which this prospectus forms a part. See “Where You Can Find More Information”.
We
have 102,000,000 shares of capital stock authorized under our certificate of incorporation, consisting of 100,000,000 shares of
common stock, $0.01 par value, and 2,000,000 shares of preferred stock, $0.01 par value.
As
of January 17, 2018 we had 23,981,253 shares of common stock outstanding. Our authorized but unissued shares of common stock are
available for issuance without further action by our stockholders, unless such action is required by applicable law or the rules
of any stock exchange or automated quotation system on which our securities may be listed or traded.
Holders
of our common stock are entitled to such dividends as may be declared by our board of directors out of funds legally available
for such purpose, subject to any preferential dividend rights of any then outstanding preferred stock. The shares of common stock
are neither redeemable or convertible. Holders of common stock have no preemptive or subscription rights to purchase any of our
securities.
Each
holder of our common stock is entitled to one vote for each such share outstanding in the holder’s name. No holder of common
stock is entitled to cumulate votes in voting for directors.
In
the event of our liquidation, dissolution or winding up, the holders of our common stock are entitled to receive pro rata our
assets which are legally available for distribution, after payments of all debts and other liabilities and subject to the prior
rights of any holders of preferred stock then outstanding. All of the outstanding shares of our common stock are fully paid and
non-assessable. The shares of common stock offered by this prospectus will also be fully paid and non-assessable.
Our
common stock is listed on the Nasdaq Capital Market under the symbol “HMNY”. On January 24, 2018, the last sale price
of our common stock was $9.15 per share. The transfer agent and registrar for our common stock is Computershare. Its address is
250 Royall Street, Canton, Massachusetts 02021.
Description
of Preferred Stock
Our
certificate of incorporation permits us to issue up to 2,000,000 shares of preferred stock in one or more series and with rights
and preferences that may be fixed or designated by our board of directors without any further action by our stockholders. We currently
have no shares of preferred stock outstanding.
Subject
to the limitations prescribed in our certificate of incorporation and under Delaware law, our certificate of incorporation authorizes
the board of directors, from time to time by resolution and without further stockholder action, to provide for the issuance of
shares of preferred stock, in one or more series, and to fix the designation, powers, preferences and other rights of the shares
and to fix the qualifications, limitations and restrictions thereof.
Description
of Warrants
Warrants
to Purchase Common Stock or Preferred Stock
We
may issue warrants for the purchase of our common stock or preferred stock, which we refer to in this prospectus as “equity
warrants”. As explained below, each equity warrant will entitle its holder to purchase our equity securities at an exercise
price set forth in, or to be determined as set forth in, the related prospectus supplement. Equity warrants may be issued separately
or together with equity securities. The equity warrants are to be issued under equity warrant agreements.
The
particular terms of each issue of equity warrants and the equity warrant agreement relating to the equity warrants will be described
in the applicable prospectus supplement, including, as applicable:
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the
title of the equity warrants;
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the
initial offering price;
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the
aggregate number of equity warrants and the aggregate number of shares of the equity security purchasable upon exercise of
the equity warrants;
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if
applicable, the designation and terms of the equity securities with which the equity warrants are issued, and the number of
equity warrants issued with each equity security;
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the
date on which the right to exercise the equity warrants will commence and the date on which the right will expire;
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if
applicable, the minimum or maximum number of the equity warrants that may be exercised at any one time;
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anti-dilution
provisions of the equity warrants, if any;
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redemption
or call provisions, if any, applicable to the equity warrants;
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any
additional terms of the equity warrants, including terms, procedures and limitations relating to the exchange and exercise
of the equity warrants; and
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Holders
of equity warrants will not be entitled, solely by virtue of being holders, to vote, to receive dividends, to receive notice as
stockholders with respect to any meeting or written consent of stockholders for the election of directors or any other matter,
or to exercise any rights whatsoever as a holder of the equity securities purchasable upon exercise of the equity warrants.
Description
of Units
We
may, from time to time, issue units comprised of one or more of the other securities described in this prospectus in any combination.
A prospectus supplement will describe the specific terms of the units offered under that prospectus supplement, and any special
considerations applicable to investing in those units. You must look at the applicable prospectus supplement and any applicable
unit agreement for a full understanding of the specific terms of any units. We will incorporate by reference into the registration
statement of which this prospectus is a part the form of unit agreement, including a form of unit certificate, if any, that describes
the terms of the series of units we are offering before the issuance of the related series of units. While the terms we have summarized
below will generally apply to any units that we may offer in the future under this prospectus, we will describe the particular
terms of any series of units that we may offer in more detail in the applicable prospectus supplement and incorporated documents.
The terms of any units offered under a prospectus supplement may differ from the terms described below.
General
We
may issue units consisting of common stock, preferred stock, warrants, subscription rights or any combination thereof. Each unit
will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a
unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued
may provide that the securities included in the unit may not be held or transferred separately, at any time, or at any time before
a specified date.
We
will describe in the applicable prospectus supplement and any incorporated documents the terms of the series of units, including
the following:
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the
designation and terms of the units and of the securities comprising the units, including
whether and under what circumstances those securities may be held or transferred separately;
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any
unit agreement under which the units will be issued; and
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any
provisions for the issuance, payment, settlement, transfer, or exchange of the units
or of the securities comprising the units.
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The
provisions described in this section, as well as those described under “Description of Common Stock,” “Description
of Preferred Stock,” and “Description of Warrants” will apply to each unit and to any common stock, preferred
stock, or warrant included in each unit, respectively.
Issuance
in Series
We
may issue units in such amounts and in such numerous distinct series as we determine.
Enforceability
of Rights by Holders of Units
Each
unit agent will act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship
of agency or trust with any holder of any unit. A single bank or trust company may act as unit agent for more than one series
of units. A unit agent will have no duty or responsibility in case of any default by us under the applicable unit agreement or
unit, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any
holder of a unit, without the consent of the related unit agent or the holder of any other unit, may enforce by appropriate legal
action its rights as holder under any security included in the unit.
Title
We,
the unit agent, and any of their agents may treat the registered holder of any unit certificate as an absolute owner of the units
evidenced by that certificate for any purposes and as the person entitled to exercise the rights attaching to the units so requested,
despite any notice to the contrary.
Description
of Subscription Rights
We
may issue subscription rights to purchase common stock, preferred stock, or other securities. These subscription rights may be
issued independently or together with any other security offered hereby and may or may not be transferable by the stockholder
receiving the subscription rights in such offering. In connection with any offering of subscription rights, we may enter into
a standby arrangement with one or more underwriters or other purchasers pursuant to which the underwriters or other purchasers
may be required to purchase any securities remaining unsubscribed for after such offering.
The
applicable prospectus supplement will describe the specific terms of any offering of subscription rights for which this prospectus
is being delivered, including the following:
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the
price, if any, for the subscription rights;
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the
exercise price payable for each share of common stock, preferred stock, or other securities
upon the exercise of the subscription rights;
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the
number of subscription rights issued to each stockholder;
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the
number and terms of the shares of common stock, preferred stock, or other securities
which may be purchased per each subscription right;
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the
extent to which the subscription rights are transferable;
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any
other terms of the subscription rights, including the terms, procedures and limitations
relating to the exchange and exercise of the subscription rights;
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the
date on which the right to exercise the subscription rights shall commence, and the date
on which the subscription rights shall expire;
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the
extent to which the subscription rights may include an over-subscription privilege with
respect to unsubscribed securities; and
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if
applicable, the material terms of any standby underwriting or purchase arrangement entered
into by us in connection with the offering of subscription rights.
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The
description in the applicable prospectus supplement of any subscription rights we offer will not necessarily be complete and will
be qualified in its entirety by reference to the applicable subscription rights certificate, which will be filed with the SEC
if we offer subscription rights. For more information on how you can obtain copies of any subscription rights certificate if we
offer subscription rights, see “Where You Can Find More Information”. We urge you to read the applicable subscription
rights certificate and any applicable prospectus supplement in their entirety.
Anti-Takeover
Effects of Certain Provisions of Delaware Law and Our Charter Documents
The
following is a summary of our certificate of incorporation and our bylaws. This summary does not purport to be complete and is
qualified in its entirety by reference to our certificate of incorporation and bylaws. Our certificate of incorporation states
that we expressly elect not to be governed by Section 203 of the General Corporation Law of the State of Delaware.
Our
charter documents include provisions that may have the effect of discouraging, delaying or preventing a change in control or an
unsolicited acquisition proposal that a stockholder might consider favorable, including a proposal that might result in the payment
of a premium over the market price for the shares held by our stockholders. These provisions are summarized in the following
paragraphs.
Effects
of authorized but unissued common stock and blank check preferred stock.
One of the effects of the existence of authorized
but unissued common stock and undesignated preferred stock may be to enable our board of directors to make more difficult or to
discourage an attempt to obtain control of our company by means of a merger, tender offer, proxy contest or otherwise, and thereby
to protect the continuity of management. If, in the due exercise of its fiduciary obligations, the board of directors were to
determine that a takeover proposal was not in our best interest, such shares could be issued by the board of directors without
stockholder approval in one or more transactions that might prevent or render more difficult or costly the completion of the takeover
transaction by diluting the voting or other rights of the proposed acquirer or insurgent stockholder group, by putting a substantial
voting block in institutional or other hands that might undertake to support the position of the incumbent board of directors,
by effecting an acquisition that might complicate or preclude the takeover, or otherwise.
In
addition, our certificate of incorporation grants our board of directors broad power to establish the rights and preferences of
authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings
and assets available for distribution to holders of shares of common stock. The issuance also may adversely affect the rights
and powers, including voting rights, of those holders and may have the effect of delaying, deterring or preventing a change in
control of our company.
Cumulative
Voting.
Our certificate of incorporation does not provide for cumulative voting in the election of directors which would
allow holders of less than a majority of the stock to elect some directors.
Vacancies.
Section 223 of the Delaware General Corporation Law and our bylaws provide that all vacancies, including newly created directorships,
may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.
Special
Meeting of Stockholders.
A special meeting of stockholders may be called by our board of directors or the Chairman of
our board of directors and at the request in writing of holders of record of a majority of our outstanding capital stock entitled
to vote. The requirement that a majority of our outstanding capital stock is required to call a special meeting means that small
stockholders will not have the power to call a special meeting to, for example, elect new directors.
PLAN
OF DISTRIBUTION
We
may offer and sell the securities in any one or more of the following ways:
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or through underwriters, brokers or dealers;
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directly
to one or more other purchasers;
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through
a block trade in which the broker or dealer engaged to handle the block trade will attempt to sell the securities as agent,
but may position and resell a portion of the block as principal to facilitate the transaction;
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through
agents on a best-efforts basis;
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in
“at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing
at the time of sale or at prices related to such prevailing market prices, including sales made directly on the Nasdaq Capital
Market or sales made through a market maker other than on an exchange or other similar offerings through sales agents; or
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otherwise
through any other method permitted by applicable law or a combination of any of the above methods of sale.
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In
addition, we may enter into option, share lending or other types of transactions that require us to deliver shares of common stock
to an underwriter, broker or dealer, who will then resell or transfer the shares of common stock under this prospectus. We may
also enter into hedging transactions with respect to our securities. For example, we may:
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enter
into transactions involving short sales of the shares of common stock by underwriters, brokers or dealers;
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sell
shares of common stock short and deliver the shares to close out short positions;
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enter
into option or other types of transactions that require the delivery of shares of common stock to an underwriter, broker or
dealer, who will then resell or transfer the shares of common stock under this prospectus; or
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loan
or pledge the shares of common stock to an underwriter, broker or dealer, who may sell the loaned shares or, in the event
of default, sell the pledged shares.
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We
may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties
in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives,
the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short
sale transactions. If so, the third party may use securities pledged by or borrowed from us or others to settle those sales or
to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives
to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and, if not
identified in this prospectus, will be identified in the applicable prospectus supplement (or a post-effective amendment). In
addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the
securities short using this prospectus. Such financial institution or other third party may transfer its economic short position
to investors in our securities or in connection with a concurrent offering of other securities.
Each
time we sell securities, we will provide a prospectus supplement that will name any underwriter, dealer or agent involved in the
offer and sale of the securities. Any prospectus supplement will also set forth the terms of the offering, including:
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the
purchase price of the securities and the proceeds we will receive from the sale of the securities;
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any
underwriting discounts and other items constituting underwriters’ compensation;
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any
public offering or purchase price and any discounts or commissions allowed or re-allowed or paid to dealers;
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any
commissions allowed or paid to agents;
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any
other offering expenses;
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any
securities exchanges on which the securities may be listed;
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the
method of distribution of the securities;
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the
terms of any agreement, arrangement or understanding entered into with the underwriters, brokers or dealers; and
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any
other information we think is important.
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If
underwriters or dealers are used in the sale, the securities will be acquired by the underwriters or dealers for their own account.
The securities may be sold from time to time by us in one or more transactions:
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at
a fixed price or prices, which may be changed;
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at
market prices prevailing at the time of sale;
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at
prices related to such prevailing market prices;
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at
varying prices determined at the time of sale; or
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Such
sales may be effected:
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in
transactions on any national securities exchange or quotation service on which the securities may be listed or quoted at the
time of sale;
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in
transactions in the over-the-counter market;
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in
block transactions in which the broker or dealer so engaged will attempt to sell the securities as agent but may position
and resell a portion of the block as principal to facilitate the transaction, or in crosses, in which the same broker acts
as an agent on both sides of the trade;
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through
the writing of options; or
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through
other types of transactions.
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The
securities may be offered to the public either through underwriting syndicates represented by one or more managing underwriters
or directly by one or more of such firms. Unless otherwise set forth in the prospectus supplement, the obligations of underwriters
or dealers to purchase the securities offered will be subject to certain conditions precedent and the underwriters or dealers
will be obligated to purchase all the offered securities if any are purchased. Any public offering price and any discount or concession
allowed or reallowed or paid by underwriters or dealers to other dealers may be changed from time to time.
The
securities may be sold directly by us or through agents designated by us from time to time. Any agent involved in the offer or
sale of the securities in respect of which this prospectus is delivered will be named, and any commissions payable to such agent
will be set forth in, the prospectus supplement. Unless otherwise indicated in the prospectus supplement, any such agent will
be acting on a best efforts basis for the period of its appointment.
Offers
to purchase the securities offered by this prospectus may be solicited, and sales of the securities may be made by us directly
to institutional investors or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect
to any resale of the securities. The terms of any offer made in this manner will be included in the prospectus supplement relating
to the offer.
Some
of the underwriters, dealers or agents used by us in any offering of securities under this prospectus may be customers of, engage
in transactions with, and perform services for us or affiliates of ours in the ordinary course of business. Underwriters, dealers,
agents and other persons may be entitled to indemnification against and contribution toward certain civil liabilities, including
liabilities under the Securities Act, and to be reimbursed for certain expenses.
Subject
to any restrictions relating to debt securities in bearer form, any securities initially sold outside the United States may be
resold in the United States through underwriters, dealers or otherwise.
Any
underwriters to which offered securities are sold by us for public offering and sale may engage in transactions that stabilize,
maintain or otherwise affect the price of the common stock during and after this offering, but those underwriters will not be
obligated to do so and may discontinue any market making at any time. Specifically, the underwriters may over-allot or otherwise
create a short position in the common stock for their own accounts by selling more common stock than have been sold to them by
us. The underwriters may elect to cover any such short position by purchasing common stock in the open market or by exercising
the over-allotment option granted to the underwriters. In addition, the underwriters may stabilize or maintain the price of the
common stock by bidding for or purchasing common stock in the open market and may impose penalty bids. If penalty bids are imposed,
selling concessions allowed to syndicate members or other broker-dealers participating in the offering are reclaimed if common
stock previously distributed in the offering are repurchased, whether in connection with stabilization transactions or otherwise.
The effect of these transactions may be to stabilize or maintain the market price of the common stock at a level above that which
might otherwise prevail in the open market. The imposition of a penalty bid may also affect the price of the common stock to the
extent that it discourages resales of the common stock. The magnitude or effect of any stabilization or other transactions is
uncertain. These transactions may be effected on the Nasdaq Capital Market or otherwise and, if commenced, may be discontinued
at any time.
In
connection with this offering, the underwriters and selling group members may also engage in passive market making transactions
in our common stock. Passive market making consists of displaying bids on the Nasdaq Capital Market limited by the prices of independent
market makers and effecting purchases limited by those prices in response to order flow. Rule 103 of Regulation M promulgated
by the SEC limits the amount of net purchases that each passive market maker may make and the displayed size of each bid. Passive
market making may stabilize the market price of the common stock at a level above that which might otherwise prevail in the open
market and, if commenced, may be discontinued at any time.
We
are subject to the applicable provisions of the Exchange Act and the rules and regulations under the Exchange Act, including Regulation
M. This regulation may limit the timing of purchases and sales of any of the shares of common stock offered in this prospectus
by any person. The anti-manipulation rules under the Exchange Act may apply to sales of shares in the market and to the activities
of us.
The
anticipated date of delivery of the securities offered by this prospectus will be described in the applicable prospectus supplement
relating to the offering.
Any
broker-dealer participating in the distribution of the shares of common stock may be deemed to be an “underwriter”
within the meaning of the Securities Act with respect to any securities such entity sells pursuant to this prospectus.
To
comply with the securities laws of some states, if applicable, the securities may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states the securities may not be sold unless they have been registered
or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.
LEGAL
MATTERS
The
validity of the issuance of the securities offered hereby will be passed upon for us by Greenberg Traurig LLP, Los Angeles, California.
Any underwriters will also be advised about the validity of the securities and other legal matters by their own counsel, which
will be named in the prospectus supplement.
EXPERTS
Rosenberg
Rich Baker Berman & Company, independent registered public accounting firm, has audited our consolidated financial statements
included in our Annual Report on Form 10-K for the years ended December 31, 2016 and 2015, as set forth in their report, which
is incorporated by reference in this prospectus supplement and elsewhere in the registration statement in which this prospectus
supplement is included. Our consolidated financial statements for the years ended December 31, 2016 and 2015 are incorporated
by reference in reliance on Rosenberg Rich Baker Berman & Company’s report, given on their authority as experts in accounting
and auditing.
The
balance sheet of Zone Technologies, Inc. as of December 31, 2015, and the related statements of operations, stockholders’
deficit, and cash flows for the period then ended, have been audited by EisnerAmper LLP, independent registered public accounting
firm, as stated in their report which is incorporated by reference from the Company’s Form 8-K/A, Amendment No. 1, filed
with the Securities and Exchange Commission on September 20, 2016, which report includes an explanatory paragraph about the existence
of substantial doubt concerning Zone Technologies, Inc.’s ability to continue as a going concern. Such financial statements
have been incorporated herein by reference in reliance on the report of such firm given upon their authority as experts in accounting
and auditing.
The
balance sheets of MoviePass Inc. as of December 31, 2016 and 2015, and the related statements of operations, stockholders’
equity, and cash flows for each of the years then ended, have been audited by EisnerAmper LLP, independent registered public accounting
firm, as stated in their report which is incorporated by reference from the Company’s Form 8-K filed with the Securities
and Exchange Commission on November 30, 2017 which report includes an explanatory paragraph about the existence of substantial
doubt concerning MoviePass Inc.’s ability to continue as a going concern. Such financial statements have been incorporated
herein by reference in reliance on the report of such firm given upon their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form S-3 under the Securities Act, with respect to the securities covered
by this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information set
forth in the registration statement or the exhibits and schedules filed therewith. For further information with respect to us
and the securities covered by this prospectus, please see the registration statement and the exhibits filed with the registration
statement. A copy of the registration statement and the exhibits filed with the registration statement may be inspected without
charge at the Public Reference Room maintained by the SEC, located at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. The SEC also maintains
an Internet website that contains reports, proxy and information statements and other information regarding registrants that file
electronically with the SEC. The address of the website is http://www.sec.gov.
We
are subject to the information and periodic reporting requirements of the Exchange Act and, in accordance therewith, we file periodic
reports, proxy statements and other information with the SEC. Such periodic reports, proxy statements and other information are
available for inspection and copying at the Public Reference Room and website of the SEC referred to above. We maintain a website
at http://www.hmny.com. You may access our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and amendments to those reports filed pursuant to Sections 13(a) or 15(d) of the Exchange Act with the SEC
free of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished
to, the SEC. Our website and the information contained on that site, or connected to that site, are not incorporated into and
are not a part of this prospectus.
INFORMATION
INCORPORATED BY REFERENCE
The
SEC and applicable law permits us to “incorporate by reference” into this prospectus information that we have or may
in the future file with or furnish to the SEC. This means that we can disclose important information by referring you to those
documents. You should read carefully the information incorporated herein by reference because it is an important part of this
prospectus. We hereby incorporate by reference the following documents into this prospectus:
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our Annual Report on
Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC on April 14, 2017;
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our Quarterly Reports
on Form 10-Q for the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017, as filed with the SEC on May 19,
2017, August 11, 2017 and November 14, 2017;
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our Current Reports
on Form 8-K filed with the SEC on January 4, 2017, January 17, 2017, January 23, 2017 (other than the portions of the filing
that were furnished rather than filed), February 7, 2017, February 10, 2017, March 14, 2017, May 23, 2017 (other than the
portions of the filing that were furnished rather than filed), June 5, 2017 (other than the portions of the filing that were
furnished rather than filed), July 13 2017, August 15, 2017 (other than the portions of the filing that were furnished rather
than filed), August 18, 2017, August 22, 2017, August 28, 2017, September 7, 2017, September 14, 2017, September 20, 2017,
October 5, 2017, October 11, 2017 (other than the portions of the filing that were furnished rather than filed), October 17,
2017, October 23, 2017, October 24, 2017; October 31, 2017, November 6, 2017, November 13, 2017, November 17, 2017, November
20, 2017, November 22, 2017, November 24, 2017, November 30, 2017, December 1, 2017, December 11, 2017, December 12, 2017,
December 13, 2017, January 9, 2018, January 11, 2018, and January 19, 2018;
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the financial statements
of Zone Technologies, Inc. for the period ended December 31, 2015 and the interim period ended June 30, 2016 included in our
Current Report on Form 8-K/A filed with the SEC on September 20, 2016; and
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the financial statements
of MoviePass Inc. for the year ended December 31, 2016 and the interim period ended September 30, 2017 included in our Current
Report on Form 8-K filed with the SEC on November 30, 2017.
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Additionally,
all documents filed by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than any portions of
filings that are furnished rather than filed pursuant to Items 2.02 and 7.01 of a Current Report on Form 8-K), after the date
of this prospectus and before the termination or completion of this offering (including all such documents filed with the SEC
after the date of the initial registration statement and prior to the effectiveness of the registration statement) shall be deemed
to be incorporated by reference into this prospectus from the respective dates of filing of such documents. Any information that
we subsequently file with the SEC that is incorporated by reference as described above will automatically update and supersede
any previous information that is part of this prospectus.
Upon
written or oral request, we will provide you without charge, a copy of any or all of the documents incorporated by reference,
other than exhibits to those documents unless the exhibits are specifically incorporated by reference in the documents. Please
send requests to Helios and Matheson Analytics Inc., Attn: Chief Executive Officer, The Empire State Building, 350 Fifth Avenue,
New York, New York 10118, telephone number is (212) 979-8228.
HELIOS
AND MATHESON ANALYTICS INC.
Series
A-3 Units consisting of One Share of Common Stock and One Series A-3
Warrant to Purchase Shares of Common Stock
Series
B-3 Units consisting of One Pre-Funded Series B-3 Warrant to
Purchase Shares of Common Stock and One Series A-3 Warrant to
Purchase Shares of Common Stock
PROSPECTUS
SUPPLEMENT
Sole
Bookrunner
Canaccord
Genuity
July
, 2018
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