Helios and Matheson Analytics Inc. Announces Preliminary Plan to Spin Off MoviePass Entertainment Entity as Separate Public Company

MoviePass Entertainment Would Become a Vertically Integrated Film Production, Marketing and Exhibition Company

Helios and Matheson Analytics Inc. HMNY ("HMNY"), a provider of information technology services and solutions, today announced that its Board of Directors preliminarily has approved a plan to create a vertically integrated film production, marketing and exhibition company. To do this, HMNY would create a new subsidiary named MoviePass Entertainment Holdings Inc. ("MoviePass Entertainment") that would take ownership of the shares of MoviePass Inc. ("MoviePass") and other film related assets held by HMNY.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181023005691/en/

Helios and Matheson Analytics Inc. announces preliminary plan to spin off MoviePass Entertainment entity as separate public company (Photo: Business Wire)

"For many years, HMNY has been focused on data analytics, and in that capacity we own assets like Zone Technologies which provides a safety and navigation app for iOS and Android users and a global security concierge service. Since we acquired control of MoviePass in December 2017, HMNY largely has become synonymous with MoviePass in the public's eye, leading us to believe that our shareholders and the market perception of HMNY might benefit from separating our movie-related assets from the rest of our company," said Ted Farnsworth, Chairman and Chief Executive Officer of HMNY.

To that end, HMNY is endeavoring to create MoviePass Entertainment Holdings as a separate publicly traded holding company that would contain the following four assets: (i) the shares of common stock of MoviePass Inc. ("MoviePass"), the nation's leading movie theater subscription service, held by HMNY, which currently comprise approximately 92% of the outstanding shares (excluding options and warrants) of MoviePass, (ii) the membership interests of MoviePass Films LLC ("MoviePass Films"), HMNY's movie production company partnered with Emmett Furla Oasis Films, held by HMNY, equal to 51% of the outstanding membership interests of MoviePass Films, (iii) the membership interests of MoviePass Ventures LLC ("MoviePass Ventures"), an acquirer and owner of economic interests in completed films, held by HMNY, equal to 100% of the outstanding membership interests of MoviePass Ventures, and (iv) Moviefone™, a multimedia media information and advertising service.

If permitted to do so under applicable Delaware law, HMNY plans to distribute a minority of the outstanding shares of MoviePass Entertainment common stock as a dividend to stockholders of HMNY as of a record date that is yet to be determined, with HMNY retaining control of MoviePass Entertainment upon any such distribution. Holders of any outstanding convertible notes issued by HMNY in November 2017 and January 2018 and certain warrants of HMNY, as of the applicable record date, would be entitled to participate in any distribution of MoviePass Entertainment shares to the extent required by the terms of such notes and warrants. As previously reported in a Current Report on Form 8-K filed by HMNY on October 4, 2018, all the convertible notes issued by HMNY in June 2018 have been cancelled.

Regardless of whether HMNY can effect a dividend of a portion of the MoviePass Entertainment shares held by it under Delaware law, HMNY plans to seek to cause MoviePass Entertainment to become a separate public company listed on Nasdaq or an alternate trading market, if MoviePass Entertainment can satisfy the applicable initial listing criteria of the applicable exchange or trading market.

Following any distribution of shares of MoviePass Entertainment and/or MoviePass Entertainment becoming a separate public company, HMNY plans to retain its ownership of Zone Technologies Inc. ("Zone") and would discontinue its previously announced plan to spin off Zone, and may pursue other acquisitions intended to create value for its stockholders. HMNY plans to continue focusing on data analytics and consumer centric technologies.

"We believe this new vertically integrated entertainment ecosystem, if achieved, would provide a sharper market focus, and that the combination of these four business lines under the MoviePass Entertainment umbrella would produce substantial synergies that we believe will generate value for our shareholders, subscribers, and business partners," said Farnsworth.

A dividend of MoviePass Entertainment shares and/or a contemplated listing of MoviePass Entertainment on Nasdaq or an alternate trading market are subject to numerous conditions, including, without limitation, completion of the contemplated reorganization described in this release, completion of audited financial statements of MoviePass Entertainment, the filing and effectiveness of a Registration Statement on Form S-1 to be filed by MoviePass Entertainment with the Securities and Exchange Commission ("SEC"), the approved listing of shares of MoviePass Entertainment on Nasdaq or an alternate trading market, and HMNY being permitted to distribute MoviePass Entertainment shares under Delaware law, of which there is no assurance. HMNY is in the process of evaluating the tax consequences, if any, of the proposed reorganization and distribution of MoviePass Entertainment shares (if and to the extent permitted under Delaware law).

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

About Helios and Matheson Analytics

Helios and Matheson Analytics Inc. HMNY is a provider of information technology services and solutions, offering a range of technology platforms focusing on big data, artificial intelligence, business intelligence, social listening and consumer-centric technology. HMNY currently owns approximately 92% of the outstanding shares (excluding options and warrants) of MoviePass Inc., the nation's premier movie-theater subscription service, 100% of the outstanding equity interests of MoviePass Ventures LLC, and 51% of the outstanding equity interests of MoviePass Films LLC. HMNY also owns Moviefone™, a multimedia media information and advertising service. HMNY's holdings include RedZone Map™, a safety and navigation app for iOS and Android users, and a community-based ecosystem that features a socially empowered safety map app that enhances mobile GPS navigation using advanced proprietary technology. HMNY is headquartered in New York, NY and listed on the Nasdaq Capital Market under the symbol HMNY. For more information, visit www.hmny.com.

Cautionary Statement on Forward-looking Information

Certain statements in this communication contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 or under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, "forward-looking statements") that may not be based on historical fact, but instead relate to future events, including without limitation statements containing the words "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect", "project" and similar expressions. All statements other than statements of historical fact included in this communication are forward-looking statements.

Such forward-looking statements are based on a number of assumptions. Although HMNY's management believes that the assumptions made and expectations represented by such statements are reasonable, there can be no assurance that a forward-looking statement contained herein will prove to be accurate. Actual results and developments (including, without limitation, the ability of HMNY to complete the planned reorganization described in this release, completion of audited financial statements for MoviePass Entertainment following such reorganization, the filing and effectiveness of a registration statement on Form S-1 registering shares of MoviePass Entertainment, and the ability of MoviePass, MoviePass Films, MoviePass Ventures and Moviefone™ to create financial benefits for each other and to derive synergies under the direct ownership of MoviePass Entertainment) may differ significantly from those expressed or implied by the forward-looking statements contained herein and even if such actual results and developments are realized or substantially realized, there can be no assurance that they will have the expected consequences or effects. Risk factors include, without limitation, the risk that the conditions to the completion of the reorganization are not satisfied, including the inability of MoviePass Entertainment to complete the necessary audited financial statements and to file and have its registration statement on Form S-1 declared effective by the SEC, the risk that the synergies and benefits from the reorganization will not be fully realized or may take longer than expected to realize, the risk that MoviePass Entertainment will be unable to satisfy Nasdaq's or the applicable alternate trading market's initial listing criteria, the risk that HMNY may not have the required surplus or cash flow solvency under Delaware law to effect a distribution of shares of MoviePass Entertainment to HMNY's securities holders, and those risk factors described in HMNY's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, its quarterly reports on Form 10-Q for the quarters ended March 31, 2018 and June 30, 2018 and other filings, including subsequent current and periodic reports, information statements and registration statements filed with the U.S. Securities and Exchange Commission. You are cautioned to review such reports and other filings at www.sec.gov.

Given these risks, uncertainties and factors, you are cautioned not to place undue reliance on such forward-looking statements and information, which are qualified in their entirety by this cautionary statement. All forward-looking statements and information made herein are based on HMNY's current expectations and HMNY does not undertake an obligation to revise or update such forward-looking statements and information to reflect subsequent events or circumstances, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20181023005691/en/