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Palladium Facilitates sale of $10,300,000 in Convertible Notes of Helios & Matheson Analytics (NASDAQ:HMNY)

Aug. 16, 2017:

New York, NY – Palladium Capital Advisors, LLC acted as sole placement agent for Helios and Matheson Analytics, Inc. (the “Company”) in their sale and issuance of three Senior Secured Convertible Notes to an institutional investor in the aggregate principal amount of $10,300,000. Some of the details are below. The full 8-K filing regarding the transaction is available here.

On August 16, 2017 (the “Closing Date”), pursuant to the Securities Purchase Agreement dated as of August 15, 2017 by and between the Company and an institutional investor (the “Investor”), the Company completed the sale and issuance of (1) three Senior Secured Convertible Notes to the Investor in the aggregate principal amount of $10,300,000 (collectively, the “Notes”), and (2) a warrant to purchase 1,892,972 shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $3.25 per share (the “Investor Warrant”), for consideration received by the Company on the Closing Date consisting of (i) a cash payment of $220,000, and (ii) a secured promissory note payable by the Investor to the Company (the “Investor Note”) in the principal amount of $8,800,000 (collectively, the “August 2017 Financing”). The maturity date of the Notes and the Investor Note is April 16, 2018. On the Closing Date, in connection with the closing of the August 2017 Financing:

  • the Company issued the Notes and the Investor Warrant to the Investor;
  • the Investor issued the Investor Note to the Company;
  • the Company entered into the Registration Rights Agreement;
  • the Company and its wholly-owned subsidiaries Zone Technologies, Inc. and HMNY Zone Loan LLC entered into the Security and Pledge Agreement in favor of the Investor as Collateral Agent;
  • Zone Technologies, Inc. and HMNY Zone Loan LLC entered into the Guaranty in favor of the Investor as Collateral Agent; and
  • Theodore Farnsworth, Helios & Matheson Information Technology Ltd. and its wholly-owned subsidiary, Helios & Matheson Inc., who collectively own approximately 49% of the Company’s issued and outstanding common stock, entered into the Voting and Lockup Agreements with the Company.

On August 15, 2017, the Company received a cash payment of $2,100,000 from the Investor under the $5,000,000 Investor Note issued by the Investor to the Company on February 8, 2017 (the “February Investor Note”). On the Closing Date, the Company received an additional cash payment of $2,900,000 under the February Investor Note, a cash payment of $230,000 under the $4,900,000 Investor Note issued by the Investor to the Company on December 2, 2017 (the “December Investor Note”) as well as a cash payment of $220,000 pursuant to the August 2017 Financing. In consideration of the total amount of $5,450,000 received by the Company (the “Total Amount”), the Company agreed to issue 80% of the shares of common stock that would be issuable upon full conversion of the Total Amount under the December Notes, the February Notes and the Series B Note (each, as defined in the August 15, 2017 Report) at a conversion price equal to the Alternate Conversion Price as defined in the Series B Note.