Exhibit
10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of March 25, 2019, between Helios and Matheson Analytics Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”).


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to an effective Registration Statement under the Securities Act
(as defined below), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires
to purchase from the Company, securities of the Company as more fully described in this Agreement.


 


NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:


 


ARTICLE I.

DEFINITIONS


 


1.1
 Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Certificate of Designation (as defined herein), and (b) the following
terms have the meanings set forth in this Section 1.1:


 


“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.4.


 


“Action”
shall have the meaning ascribed to such term in Section 3.1(j).


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.


 


“Agreement”
shall have the meaning ascribed to such term in the preamble hereto.


 


“Amendment
Letters” shall have the meaning ascribed to such term in Section 2.2(a)(viii).


 


“BFAC”
shall have the meaning ascribed to such term in Section 3.1(jj).


 


“Board
of Directors” means the board of directors of the Company.


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.


 






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“Buy-In”
shall have the meaning ascribed to such term in Section 4.10(c).


 


“Certificate
of Designation” means the Certificate of Designation to be filed prior to the Closing by the Company with the Secretary
of State of Delaware, in the form of Exhibit A attached hereto.


 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (a) the Purchasers’ obligations to pay the Subscription Amount and (b) the
Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than
the second (2nd) Trading Day following the date hereof.


 


“Commission”
means the United States Securities and Exchange Commission.


 


“Common
Stock” means the common stock of the Company, par value $0.01, and any other class of securities into which such securities
may hereafter be reclassified or changed.


 


“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.


 


“Company”
shall have the meaning ascribed to such term in the preamble hereto.


 


“Company
Counsel” means Greenberg Traurig, LLP, with offices located at 1840 Century Park East, Suite 1900, Los Angeles, CA 90067.


 


“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.


 


“Disclosure
Time” means prior to 9:00 a.m. (New York City time) on Tuesday, March 26, 2019, unless otherwise instructed as to an
earlier time by the Placement Agent.


 


“Distribution”
shall have the meaning ascribed to such term in Section 4.10(e).


 


“Effective
Date” shall have the meaning ascribed to such term in Section 3.1(f).


 


“Environmental
Laws” shall have the meaning ascribed to such term in Section 3.1(m).


 


“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).


 






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“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, consultants (provided such
issuances to consultants shall not exceed $100,000 shares per month), officers or directors of the Company pursuant to any stock
or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority
of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b)
securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided
that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations)
or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by
a majority of the disinterested directors of the Company; provided, that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration
statement in connection therewith during the prohibition period in Section 4.11(a) herein; and provided, further,
that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries,
an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the
Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities to an entity whose primary business is investing in securities, (d) up to 18,545 (subject to adjustment for
reverse and forward stock splits and the like) shares of Common Stock to various officers, directors, employees and consultants
previously approved by the Board of Directors; provided, that such shares are issued as “restricted securities”
(as defined in Rule 144), and (e) 2,000 (subject to adjustment for reverse and forward stock splits and the like) shares of Common
Stock reserved for issuance to Helios and Matheson Information Technology Ltd. in exchange for entering into prior lockup agreements,
provided, that such shares are issued as “restricted securities” (as defined in Rule 144).


 


“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.


 


“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(jj).


 


“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).


 


“Hazardous
Materials” shall have the meaning ascribed to such term in Section 3.1(m).


 


“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(z).


 






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“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).


 


“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).


 


“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(kk).


 


“OFAC”
shall have the meaning ascribed to such term in Section 3.1(hh).


 


“Per
Preferred Purchase Price” equals $100.00 per share of Preferred Stock, subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date
of this Agreement.


 


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


“Placement
Agent” means H.C. Wainwright & Co., LLC.


 


“Preferred
Stock” means the Series B Preferred Stock of the Company, par value $0.01, issued pursuant to the term so of the Certificate
of Designation.


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.


 


“Prospectus”
means the final base prospectus filed for the Registration Statement.


 


“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to each Purchaser at the Closing.


 


“Purchase
Rights” shall have the meaning ascribed to such term in Section 4.10(d).


 


“Purchaser”
shall have the meaning ascribed to such term in the preamble hereto.


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.7.


 






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“Registration
Statement” means the effective registration statement with Commission file No. 333-226024 which registers the sale of
the Preferred Stock, the Warrant Shares and the Underlying Shares.


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


 


“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.


 


“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).


 


“Securities”
means the Preferred Stock, the Warrants, the Warrant Shares and the Underlying Shares.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Series
F-1 Warrants” Shall have the meaning ascribed to such term in Section 2.2(a)(vi).


 


“Series
F-2 Warrants” Shall have the meaning ascribed to such term in Section 2.2(a)(vii).


 


“Shareholder
Approval” means such approval as may be required to increase the authorized share capital of the Company or to effect
a reverse stock split of the Company’s Common Stock to allow for the reservation in full of all of the Underlying Shares
issuable pursuant to the Transaction Documents (ignoring for such purposes any exercise under the Warrants or conversion limitations
under the Certificate of Designations).


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include locating and/or borrowing shares of Common Stock).


 


“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Preferred Stock and Warrants purchased hereunder
as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds.


 






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“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a), and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange, OTCQB, OTCQX, or OTC Pink (or any successors to any of the foregoing).


 


“Transaction
Documents” means this Agreement, the Certificate of Designation, the Warrants, all exhibits and schedules thereto and
hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer
Agent” means Computershare, the current transfer agent of the Company, with a mailing address of 350 Indiana Street,
Suite 750, Golden, Colorado 80401, and any successor transfer agent of the Company.


 


“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Preferred Stock and upon conversion
of the Warrant Shares issued and issuable in accordance with the terms of the Certificate of Designation.


 


“Warrants”
means, collectively, the Series F-1 Preferred Stock Purchase Warrants and Series F-2 Preferred Stock Purchase Warrants delivered
to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable commencing
immediately and have a term of exercise equal to five years, in substantially the form of Exhibit B attached hereto.


 


“Warrant
Shares” means the shares of Preferred Stock issuable upon exercise of the Warrants.


 


ARTICLE II.

PURCHASE AND SALE


 


2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent
with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, up to an aggregate of $6,000,000 of shares of Preferred Stock for each Purchaser equal to the
number as set forth on the signature page hereto executed by such Purchaser, and Warrants as determined by pursuant to Section
2.2(a). The aggregate number of shares of Preferred Stock sold hereunder shall be up to 60,000 shares. Each Purchaser shall
deliver to the Company, via wire transfer or a certified check, immediately available funds equal to its Subscription Amount, and
the Company shall deliver to each Purchaser its respective shares of Preferred Stock and Warrants, as determined pursuant to Section
2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the
Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur
at the offices of Ellenoff Grossman & Schole LLP or such other location as the parties shall mutually agree. The Company
covenants that, if a Purchaser delivers a Notice of Conversion to convert any shares of Preferred Stock between the date hereof
and the Closing Date, the Company shall deliver the Underlying Shares underlying such Preferred Stock to such Purchaser on the
Closing Date in connection with such Notice of Conversion.


 






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2.2
Deliveries.


 


(a)
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:


 


(i) this
Agreement duly executed by the Company;


 


(ii)
a legal opinion of Company Counsel, in a form reasonably acceptable to the Placement Agent and Purchasers;


 


(iii)
a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis
via The Depository Trust Company Deposit or Withdrawal at Custodian system, a number of shares of Preferred Stock equal to such
Purchaser’s Subscription Amount divided by the Per Preferred Purchase Price, registered in the name of such Purchaser;


 


(iv)
evidence of the filing and acceptance of the Certificate of Designation from the Secretary of State of Delaware;


 


(v) the
Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by
the Chief Executive Officer or Chief Financial Officer;


 


(vi) such
number of Warrants registered in the name of such Purchaser to purchase up to a number of shares of Preferred Stock equal to
99.6% of such Purchaser’s shares of Preferred Stock, which Warrants shall be exercisable immediately with an exercise
price equal to $100.00, subject to adjustment therein (collectively, “Series F-1 Warrants”);


 


(vii)
such number of Warrants registered in the name of such Purchaser to purchase up to a number of shares of Preferred Stock
equal to 100.4% of such Purchaser’s shares of Preferred Stock, which Warrants shall be exercisable commencing on the date that
Shareholder Approval is obtained and deemed effective, with an exercise price equal to $100.00, subject to adjustment therein (collectively,
“Series F-2 Warrants”);


 


(viii)
to Purchasers who hold Series C Common Stock Purchase Warrants or Series D Common Stock Purchase Warrants of the Company,
written letter agreements duly executed by the Company reducing the exercise price of such Series C Common Stock Purchase Warrants
and Series D Common Stock Purchase Warrants, pursuant to the terms and conditions set forth therein (collectively, the “Amendment
Letters”); and


 






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(ix) the
Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).


 


(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:


 


(i)
this Agreement duly executed by such Purchaser;


 


(ii)
with respect to each Purchaser who holds Series C Common Stock Purchase Warrants or Series D Common Stock Purchase Warrants
of the Company, an Amendment Letter, duly executed by such Purchaser; and


 


(iii)
such Purchaser’s Subscription Amount.


 


2.3
Closing Conditions.


 


(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:


 


(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers contained
herein (unless as of a specific date therein in which case they shall be accurate as of such date);


 


(ii)
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall
have been performed; and


 








(iii)
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.


 


(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being
met:


 


(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein in which case they shall be accurate as of such date);


 


(ii)
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall
have been performed;


 






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(iii)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;


 


(iv)
there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and


 


(v)
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or
the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported
by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market
which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities
at the Closing.


 


ARTICLE III.

REPRESENTATIONS AND WARRANTIES


 


3.1
Representations and Warranties of the Company. Except as set forth in the SEC Reports and the Disclosure Schedules,
which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent
of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations
and warranties to each Purchaser:


 


(a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a).
The Company owns, directly or indirectly, the capital stock or other equity interests of each Subsidiary that it owns free and
clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are
fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has
no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.


 


(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with
the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations,
assets, business, or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material
adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”), and no Proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 






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(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.


 


(d) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction
Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,
anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which
the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected,
or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.


 






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(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filings required pursuant to Section 4.3 of this Agreement, (ii) the filing with the Commission of the
Prospectus Supplement, (iii) such filings as are required to be made under applicable state securities laws and (iv) Shareholder
Approval (collectively, the “Required Approvals”).


 


(f) Issuance of the Securities; Registration. The shares of Preferred Stock are duly authorized and, when issued and
paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company. The Warrants are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will constitute valid and legally binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer,
fraudulent conveyance, moratorium or other laws now or hereafter in effect relating to or affecting enforcement of creditors’
rights generally and by general principles of equity (including without limitation concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether such enforcement is considered in a proceeding at law or in equity. The Warrant
Shares are duly authorized and, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable as Underlying Shares pursuant to this Agreement and the Certificate of Designation
other than Warrant Shares underlying the Series F-2 Warrants. The Company has prepared and filed the Registration Statement in
conformity with the requirements of the Securities Act, which became effective on July 5, 2018 (the “Effective Date”),
including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement.
The Company was at the time of the filing of the Registration Statement eligible to use Form S-3. The Company is eligible to use
Form S-3 under the Securities Act and the transaction contemplated by the Transaction Documents meets the transaction requirements
as set forth in General Instruction I.B.1 of Form S-3. The Registration Statement is effective under the Securities Act and no
stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the
Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the
Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file
the Prospectus Supplement with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments
thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments
thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus
or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects
to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading.


 






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(g) Capitalization.
The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the
number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. The Company
has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to
the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to
employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common
Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. Except as set
forth on Schedule 3.1(g), no Person has any right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale
of the Securities, and except as set forth on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights
to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock
or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any
Subsidiary. Except as set forth on Schedule 3.1(g), the issuance and sale of the Securities will not obligate the Company
or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result
in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.
Except as set forth on Schedule 3.1(g), there are no outstanding securities or instruments of the Company or any Subsidiary
that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by
which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company
does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.
All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. Except as described in
the SEC Reports, there are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s
stockholders.


 






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(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on
a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. Except as described in the SEC Reports, as of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company
has never been an issuer subject to Rule 144(i) under the Securities Act. Except as described in the SEC Reports, the financial
statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Except as described in
the SEC Reports, such financial statements have been prepared in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in
such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required
by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as
of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.


 


(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements
included within the SEC Reports, except as set forth in the SEC Reports or in Schedule 3.1(i), (i) there has been no
event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission
any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this
Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has
occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their
respective businesses, properties, operations, assets or financial condition that would be required to be disclosed by the
Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly
disclosed at least 1 Trading Day prior to the date that this representation is made.


 






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(j) Litigation.
Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality,
validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse Effect. Except as set forth on Schedule 3.1(j), neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company
or any current or former director or officer of the Company that would be required to be disclosed under applicable securities
laws and which has not been publicly announced. The Commission has not issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.


 


(k) Labor
Relations. Except as set forth on Schedule 3.1(k), no labor dispute exists or, to the knowledge of the Company, is
imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse
Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s
relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and
the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. To the knowledge of the Company, the Company and its Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.


 






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(l)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree
or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance
or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to
taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except
in each case as could not have or reasonably be expected to result in a Material Adverse Effect.


 


(m) Environmental Laws.The Company and its Subsidiaries (i) are in compliance with all federal, state, local and
foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater,
land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into
the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder
(“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect.


 


(n)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued
by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as
described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a
Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice
of proceedings relating to the revocation or modification of any Material Permit.


 


(o)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property
owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company
and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries,
(ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance
with GAAP and, the payment of which is neither delinquent nor subject to penalties, and (iii) Liens set forth on Schedule 3.1(o).
Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting
and enforceable leases with which the Company and the Subsidiaries are in compliance.


 






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(p)
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights necessary or required for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the
date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any
knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or
reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights except as set
forth in the complaint filed by MoviePass Inc. against Sinemia Inc. for patent infringement in a case filed on February 23, 2018
in the United States District Court, Central District of California (Case no. 2:18-cv-01517-SJO-PLA). The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company has no knowledge of any facts that would preclude it from having valid license rights or clear title to the Intellectual
Property Rights. The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual
Property Rights that are necessary to conduct its business.


 


(q)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries
are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription
Amount. Neither the Company nor any Subsidiary has been advised that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost.


 


(r) Transactions
With Affiliates and Employees. Except as set forth on Schedule 3.1(r) and as disclosed in the SEC Reports, none of
the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services
as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or
lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of
the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements under any stock option plan of the Company.


 






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(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and
regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date in
all material respects. Except as set forth in the SEC Reports, the Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only
in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to provide
reasonable assurances that information required to be disclosed by the Company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and
procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report
under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently
filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, except as
disclosed in the SEC Reports, there have been no changes in the internal control over financial reporting (as such term
is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to
materially affect, the internal control over financial reporting of the Company and its Subsidiaries.


 


(t) Certain
Fees. Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will
be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The
Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by
the Transaction Documents.


 






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(u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.


 


(v) Registration
Rights. Except as disclosed in the SEC Reports, no Person has any right to cause the Company or any Subsidiary to effect the
registration under the Securities Act of any securities of the Company or any Subsidiary.


 


(w) Listing
and Maintenance Requirements. Except as set forth in the SEC Reports, the Common Stock is registered pursuant to Section
12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. Except as set forth in the SEC Reports, the
Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common
Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Common Stock is currently eligible for electronic transfer through the Depository
Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository
Trust Company (or such other established clearing corporation) in connection with such electronic transfer.


 


(x)
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of
the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including
without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.


 


(y)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or might constitute material, non-public information
which is not otherwise disclosed in the Prospectus Supplement. The Company understands and confirms that the Purchasers will rely
on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on
behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct in all material respects and does
not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated by
the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and
agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 3.2 hereof.


 






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(z)
Indebtedness. Schedule 3.1(z) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement,
“Indebtedness” means (i) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than
trade accounts payable incurred in the ordinary course of business), (ii) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (iii) the present value of any lease payments in excess of $50,000 due under leases required
to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.


 


(aa)
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state
and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the
payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company or of any Subsidiary know of no basis for any such claim.


 


(bb)
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made
by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material
respect any provision of FCPA.


 






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(cc)
Accountants. The Company’s independent registered public accounting firm is Rosenberg Rich Baker Berman, P.A.
To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the
Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s
Annual Report for the fiscal year ended December 31, 2018.


 


(dd)
 Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each
of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The
Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction
Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.


 


(ee) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(e) and 4.13 hereof), it is understood and acknowledged by the Company that: (i) none of
the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long
and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to
hold the Securities for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically
including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future
private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii)
any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or
indirectly, presently may have a “short” position in the Common Stock, and (iv) each Purchaser shall not be deemed
to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.
The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times
during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the
Underlying Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could
reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities
are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of
any of the Transaction Documents.


 






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(ff)
Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to
the Company’s placement agent in connection with the placement of the Securities.


 


(gg)
Stock Option Plans. The Company has not granted any stock options under its stock option plan.


 


(hh)
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any
director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).


 


(ii)
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation
within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.


 


(jj)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.


 


(kk)
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in
compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company or any Subsidiary, threatened.


 






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3.2
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein,
in which case they shall be accurate as of such date):


 


(a)
Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate,
partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated
by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of
the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have
been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the
part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered
by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be limited by applicable law.


 


(b)
Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has
no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such
Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.


 


(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is,
and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in
Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer”
as defined in Rule 144A(a) under the Securities Act.


 


(d)
Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective
investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.


 


(e)
Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents
(including all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions
as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the
Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can
acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. 
Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such
Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired. 
Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities
and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser
agrees need not be provided to it.  In connection with the issuance of the Securities to such Purchaser, neither the Placement
Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.


 






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(f)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser
has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time
that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company
setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision
to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s
representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in
order to effect Short Sales or similar transactions in the future.


 


(g)
Reliance on Financial Statements. Such Purchaser acknowledges and agrees that it has read (i) the Company’s
Current Report on Form 8-K filed with the SEC on March 12, 2019, which discloses that the Company’s previously issued quarterly
and year-to-date unaudited consolidated financial statements for September 30, 2018, should no longer be relied upon, (ii) the
Form 10-Q amendment filed with the SEC on March 19, 2019 relating to the restatement of the financial statements contained therein,
and (iii) the Form 12b-25 filed with the SEC on March 18, 2019, which discloses that the Company does not believe it will file
with the SEC its Form 10-K for the year ended December 31, 2018 when it is due.


 


The Company acknowledges
and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing
shares in order to effect Short Sales or similar transactions in the future.


 






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ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1
Warrant Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration
statement to cover the issuance or resale of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant
Shares issued pursuant to any such exercise and the Underlying Shares issuable pursuant to any conversion of the Warrant Shares
shall be issued free of all legends. If at any time following the date hereof the Registration Statement (or any subsequent registration
statement registering the sale or resale of the Warrant Shares and Underlying Shares) is not effective or is not otherwise available
for the sale or resale of the Warrant Shares and Underlying Shares, the Company shall immediately notify the holders of the Warrants
in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration
statement is effective again and available for the sale or resale of the Warrant Shares and Underlying Shares (it being understood
and agreed that the foregoing shall not (a) limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant
Shares in compliance with applicable federal and state securities laws or (b) obligate the Company to register the Warrant Shares
and Underlying Shares issuable thereunder for resale on any registration statement). The Company shall use commercially reasonable
efforts to keep the Registration Statement registering the issuance of the Warrant Shares and Underlying Shares effective during
the term of the Warrants.


 


4.2
Furnishing of Information. Until the earlier of the time that (a) no Purchaser owns Securities and (b) the Warrants
have expired or are otherwise no longer outstanding, the Company covenants to use commercially reasonable efforts to timely file
(or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the
Exchange Act.


 


4.3
Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing
the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction
Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of
such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information
delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees
or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance
of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement,
whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees
or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company
and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each
Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except
if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice
of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any
Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without
the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with the filing of
final Transaction Documents with the Commission and (ii) to the extent such disclosure is required by law or Trading Market regulations,
in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (ii).


 






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4.4
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any
other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.


 


4.5
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, which shall be disclosed pursuant to Section 4.3, the Company covenants and agrees that neither
it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes,
or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have
consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent,
the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its
Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of
its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of,
such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent
that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding
the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company.


 






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4.6
Use of Proceeds. Except as set forth on Schedule 4.6 attached hereto, the Company shall use the net proceeds
from the sale of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction
of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s
business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of
any outstanding litigation or (d) in violation of FCPA or OFAC regulations.


 


4.7
Indemnification of Purchasers. Subject to the provisions of this Section 4.7, the Company will indemnify and
hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person
who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each,
a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages,
costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) a material breach of
any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction
Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates,
by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated
by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with
any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser
Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall
be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party
shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of
its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Party except to the extent that (x) the employment thereof has been specifically authorized by the Company in writing,
(y) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (z) in such action
there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and
the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no
more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (1) for any settlement
by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed;
or (2) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in
the other Transaction Documents. The indemnification required by this Section 4.7 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company
or others and any liabilities the Company may be subject to pursuant to law.


 






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4.8
Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve
and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling
the Company to issue shares of Common Stock upon conversion of the Preferred Stock pursuant to this Agreement and upon conversion
of the Preferred Stock underlying the Warrant Shares issuable pursuant to any exercise of the Warrants, other than the Warrant
Shares underlying the Series F-2 Warrants.


 


4.9
Listing of Common Stock. The Company hereby agrees to use commercially reasonable efforts to maintain the listing
or quotation of the Common Stock on the Trading Market on which it is currently listed. The Company further agrees, if the Company
applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Underlying
Shares, and will take such other action as is necessary to cause all of the Underlying Shares to be listed or quoted on such other
Trading Market as promptly as possible. The Company will then use commercially reasonable efforts to continue the listing and trading
of its Common Stock on such other Trading Market and will comply in all respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of such other Trading Market. The Company agrees to use commercially reasonable efforts
to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established
clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established
clearing corporation in connection with such electronic transfer.


 


4.10
Company Conversion Obligations.


 


(a)
Rescission. If, in the case of any Notice of Conversion by a Purchaser, Underlying Shares are not delivered to or
as directed by such Purchaser by the Share Delivery Date, such Purchaser shall be entitled to elect by written notice to the Company
at any time on or before its receipt of such Underlying Shares, to rescind such conversion, in which event the Company shall promptly
return to the Purchaser any original Preferred Stock certificate delivered to the Company and the Purchaser shall promptly return
to the Company the Underlying Shares issued to such Purchaser pursuant to the rescinded Notice of Conversion.


 


(b)
Obligation Absolute; Partial Liquidated Damages. The Company’s obligation to issue and deliver the Underlying
Shares upon conversion of Preferred Stock in accordance with the terms of the Preferred Stock are absolute and unconditional, irrespective
of any action or inaction by a Purchaser to enforce the same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by such Purchaser or any other Person of any obligation to the Company or any violation or alleged
violation of law by such Purchaser or any other person, and irrespective of any other circumstance which might otherwise limit
such obligation of the Company to such Purchaser in connection with the issuance of such Underlying Shares; provided, however,
that such delivery shall not operate as a waiver by the Company of any such action that the Company may have against such Purchaser.
In the event a Purchaser shall elect to convert any or all of its Preferred Stock, the Company may not refuse conversion based
on any claim that such Purchaser or any one associated or affiliated with such Purchaser has been engaged in any violation of law,
agreement or for any other reason, unless an injunction from a court, on notice to Purchaser, restraining and/or enjoining conversion
of all or part of the Preferred Stock of such Purchaser shall have been sought and obtained, and the Company posts a surety bond
for the benefit of such Purchaser in the amount of $150 for each share of Preferred Stock which is subject to the injunction, which
bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which
shall be payable to such Purchaser to the extent it obtains judgment. In the absence of such injunction, the Company shall issue
Underlying Shares and, if applicable, cash, upon a properly noticed conversion. If the Company fails to deliver to a Purchaser
such Underlying Shares pursuant to the terms of the Certificate of Designation by the Share Delivery Date applicable to such conversion,
the Company shall pay to such Purchaser, in cash, as liquidated damages and not as a penalty, for each share of Preferred Stock
being converted, $5 per Trading Day (increasing to $10 per Trading Day on the third Trading Day and increasing to $20 per Trading
Day on the sixth Trading Day after such damages begin to accrue) for each Trading Day after the Share Delivery Date until such
Underlying Shares are delivered or Purchaser rescinds such conversion. Nothing herein shall limit a Purchaser’s right to
pursue actual damages for the Company’s failure to deliver Underlying Shares within the period specified herein and such
Purchaser shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit a Purchaser from
seeking to enforce damages pursuant to any other Section hereof or under applicable law.


 






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(c)
Compensation for Buy-In on Failure to Timely Deliver Underlying Shares Upon Conversion. In addition to any other
rights available to a Purchaser, if the Company fails for any reason to deliver to such Purchaser the Underlying Shares by the
applicable Share Delivery Date pursuant to the Certificate of Designation, and if after such Share Delivery Date such Purchaser
is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Purchaser’s brokerage
firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of the Underlying Shares
which such Purchaser was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”),
then the Company shall (a) pay in cash to such Purchaser (in addition to any other remedies available to or elected by such Purchaser)
the amount, if any, by which (i) such Purchaser’s total purchase price (including any brokerage commissions) for the Common
Stock so purchased exceeds (ii) the product of (A) the aggregate number of shares of Common Stock that such Purchaser was entitled
to receive from the conversion at issue multiplied by (B) the actual sale price at which the sell order giving rise to such purchase
obligation was executed (including any brokerage commissions) and (b) at the option of such Purchaser, either reissue (if surrendered)
the shares of Preferred Stock equal to the number of shares of Preferred Stock submitted for conversion (in which case, such conversion
shall be deemed rescinded) or deliver to such Purchaser the number of shares of Common Stock that would have been issued if the
Company had timely complied with its delivery requirements under the Certificate of Designation. For example, if a Purchaser purchases
shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares
of Preferred Stock with respect to which the actual sale price of the Underlying Shares (including any brokerage commissions) giving
rise to such purchase obligation was a total of $10,000 under clause (a) of the immediately preceding sentence, the Company shall
be required to pay such Purchaser $1,000. The Purchaser shall provide the Company written notice indicating the amounts payable
to such Purchaser in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein
shall limit a Purchaser’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver
the Underlying Shares upon conversion of the shares of Preferred Stock as required pursuant to the terms hereof.


 


(d)
Subsequent Rights Offerings. In addition to any adjustments pursuant to the terms of the Certificate of Designation,
if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities
or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”),
then each Purchaser of will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which such Purchaser could have acquired if such Purchaser had held the number of shares of Common Stock acquirable upon complete
conversion of such Purchaser’s Preferred Stock (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation set forth in the Certificate of Designation) immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however,
to the extent that a Purchaser’s right to participate in any such Purchase Right would result in the Purchaser exceeding
the Beneficial Ownership Limitation set forth in the Certificate of Designation, then such Purchaser shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for such Purchaser until such time, if ever, as
its right thereto would not result in such Purchaser exceeding the Beneficial Ownership Limitation set forth in the Certificate
of Designation).


 


(e)
Pro Rata Distributions. During such time as this Preferred Stock is outstanding, if the Company declares or makes
any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way
of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property
or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”), at any time after the issuance of this Preferred Stock, then, in each such case, each Purchaser
shall be entitled to participate in such Distribution to the same extent that a Purchaser would have participated therein if such
Purchaser had held the number of shares of Common Stock acquirable upon complete conversion of such Purchaser’s Preferred
Stock (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation
set forth in the Certificate of Designation) immediately before the date of which a record is taken for such Distribution, or,
if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, to the extent that a Purchaser’s right to participate in any such
Distribution would result in such Purchaser exceeding the Beneficial Ownership Limitation set forth in the Certificate of Designation,
then such Purchaser shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of
any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held
in abeyance for the benefit of such Purchaser until such time, if ever, as its right thereto would not result in the Purchaser
exceeding the Beneficial Ownership Limitation set forth in the Certificate of Designation).


 






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4.11
Subsequent Equity Sales.


 


(a)
From the date hereof until the later of (i) the date that Shareholder Approval is obtained and deemed effective and (ii)
30 days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce
the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.


 


(b)
Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance.


 


4.12
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be
offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless
the same consideration is also offered to all of the parties to such Transaction Documents. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended
for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or
as a group with respect to the purchase, disposition or voting of Securities or otherwise.


 


4.13
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales,
including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement
and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial
press release as described in Section 4.3.  Each Purchaser, severally and not jointly with the other Purchasers, covenants
that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial
press release as described in Section 4.3, such Purchaser will maintain the confidentiality of the existence and terms of
this transaction and the information included in the Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (a) no Purchaser makes
any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company
after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press
release as described in Section 4.3, (b) no Purchaser shall be restricted or prohibited from effecting any transactions
in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated
by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.3 and (c)
no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its
Subsidiaries after the issuance of the initial press release as described in Section 4.3.  Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions
of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to
the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by
this Agreement.


 






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4.14
Conversion and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form
of Notice of Conversion included in the Certificate of Designation set forth the totality of the procedures required of the Purchasers
in order to exercise the Warrants or convert the Preferred Stock. Without limiting the preceding sentences, no ink-original Notice
of Exercise or Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise or Notice of Conversion form be required in order to exercise the Warrants or convert the Preferred Stock.
No additional legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants or
convert their Preferred Stock. The Company shall honor exercises of the Warrants and conversions of the Preferred Stock and shall
deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.


 


4.15
Shareholder Approval. On or before May 31, 2019, the Company shall hold a meeting of its shareholders for the purpose
of obtaining Shareholder Approval, with the recommendation of the Company’s Board of Directors that such proposal be approved,
and the Company shall solicit proxies from its shareholders in connection therewith in the same manner as all other management
proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal.
The Company shall use its reasonable best efforts to obtain such Shareholder Approval. If the Company does not obtain Shareholder
Approval at the first meeting, the Company shall call a meeting every four months thereafter to seek Shareholder Approval until
the earlier of the date Shareholder Approval is obtained or the Preferred Stock is no longer outstanding.


 


4.16
No Other Warrant Amendment. So long as the Warrants remain outstanding, the Company shall not amend, modify or exchange
any outstanding warrants or options of the Company (other than pursuant to the Amendment Letters) without the prior written consent
of each Purchaser.


 






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ARTICLE V.

MISCELLANEOUS


 


5.1
Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder
only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the
other parties, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof;
provided, however, that no such termination will affect the right of any party to sue for any breach by any other
party (or parties).


 


5.2
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay
the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all
Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered
by the Company and any conversion or exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in
connection with the delivery of any Securities to the Purchasers.


 


5.3
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and
the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.


 


5.4
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or
communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature
pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of
transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email
address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York
City time) on any Trading Day, (c) the second (2nd)Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice
provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company
or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form
8-K.


 






    31


     


    

 


5.5
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a
written instrument signed, in the case of an amendment, by the Company and Purchasers or, in the case of a waiver, by the party
against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver
disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted
Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or
a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately,
materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations
of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in
accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.


 


5.6
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not
be deemed to limit or affect any of the provisions hereof.


 


5.7
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any
Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”


 


5.8
No Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and
warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2.
This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not
for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section
4.7 and this Section 5.8.


 


5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction
Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought
against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any
Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding
is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under
Section 4.7, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action
or Proceeding.


 






    32


     


    

 


5.10
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.


 


5.11
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an original thereof.


 


5.12
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.


 


5.13
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any
similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided,
then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however,
that in the case of a rescission of a conversion of the Preferred Stock or an exercise of a Warrant, the applicable Purchaser shall
be required to return any shares of Common Stock subject to any such rescinded conversion or exercise notice concurrently with
the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s
right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate
evidencing such restored right).


 






    33


     


    

 


5.14
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in
the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under
such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance
of such replacement Securities.


 


5.15
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery
of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any
such obligation the defense that a remedy at law would be adequate.


 


5.16
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.


 


5.17
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way
for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated
by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without
limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for
any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience
only, each Purchaser and its respective counsel have chosen to communicate with the Company through the legal counsel of the Placement
Agent. The legal counsel of the Placement Agent does not represent any of the Purchasers and only represents the Placement Agent.
The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company
and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and
not between the Company and the Purchasers collectively and not between and among the Purchasers.


 






    34


     


    

 


5.18
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing
under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated
damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial
liquidated damages or other amounts are due and payable shall have been canceled.


 


5.19
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of
any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.


 


5.20
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be
subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.


 


5.21
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 





 


(Signature Pages Follow)


 










    35


     


    


 


IN WITNESS WHEREOF,
the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.


 





	
        Helios and Matheson
        Analytics Inc. 

         
	Address for Notice:
	
        By: ____________________________________

        Name: Theodore Farnsworth

        Title: Chief Executive Officer

         

         

        

        With a copy to (which shall not constitute notice):
	
        Empire State Building

        350 5th Ave., Suite 7520

        New York, NY 10118

        Attention: Chief Financial Officer

        Fax: (929) 214-4119

        E-mail: robert.damon@verizon.net

	
         

        Kevin Friedmann

        Greenberg Traurig, LLP

        1840 Century Park East, Suite 1900

        Los Angeles, CA 90067-2121

        Fax: (310) 586-7800

        E-mail: friedmannk@gtlaw.com

        
	 


 








[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 




    36


     


    


 


[PURCHASER SIGNATURE PAGES TO HMNY SECURITIES
PURCHASE AGREEMENT]


 


IN WITNESS WHEREOF,
the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as
of the date first indicated above.


 


Name of Purchaser: ______________________________________________________


 


Signature of Authorized Signatory of
Purchaser: _________________________________


 


Name of Authorized Signatory: _______________________________________________


 


Title of Authorized Signatory: ________________________________________________


 


Email Address of Authorized Signatory:
_________________________________________


 


Facsimile Number of Authorized Signatory: _______________________________________


 


Address for Notice to Purchaser:


 








Address for Delivery of Warrants to Purchaser (if not same as
address for notice):


 





Subscription Amount: $_________________


 


Shares of Preferred Stock: ____________________


 


Warrant Shares: __________________


 


Shares Underlying Warrant Shares: __________________


 


EIN Number: ____________________


 





[SIGNATURE PAGES CONTINUE]


 




    37


     


    





 







 



 


DISCLOSURE SCHEDULES TO THE


 


SECURITIES PURCHASE AGREEMENT


 







 



 


These Disclosure Schedules
are being delivered by Helios and Matheson Analytics Inc., a Delaware corporation (the “Company”), to each purchaser
identified on the signature pages to that certain Securities Purchase Agreement, dated March 25, 2019 (as may be amended from time
to time, the “Agreement”). Capitalized terms used herein, but not defined herein, shall have the respective
meanings ascribed thereto in the Agreement.


 


The inclusion of any
information in these Disclosure Schedules shall not be deemed to be an admission or evidence of the materiality of such information,
nor shall it establish a standard of materiality for any purpose whatsoever. Matters reflected in these Disclosure Schedules are
not necessarily limited to matters required by the Agreement to be disclosed in these Disclosure Schedules. Neither the specification
of any dollar amount in the representations and warranties contained in the Agreement nor the inclusion of any specific item in
these Disclosure Schedules is intended to imply that such amounts, higher or lower amounts, the items so included or other items,
are or are not material, and no party to the Agreement shall use the fact of the setting of such amounts or the fact of the inclusion
of any such item in these Disclosure Schedules in any dispute or controversy between the parties as to whether any obligation,
item or matter is or is not material, or may constitute an event or condition which could be considered to have a Material Adverse
Effect.


 


No disclosure in these
Disclosure Schedules relating to any possible or alleged breach or violation of any law or contract shall be construed as an admission
or indication that any such breach or violation exists or has actually occurred. In disclosing the information in these Disclosure
Schedules, each of the Company and its Subsidiaries expressly does not waive any attorney-client privilege associated with such
information or any protection afforded by the work-product doctrine with respect to any of the matters disclosed or discussed herein.
References in these Disclosure Schedules to any contract or other agreement, whether or not binding, include references to such
contract’s or other agreement’s exhibits, annexes and schedules.


 




    Sch-1 


     


    


 


Schedule 3.1(a)


 


Subsidiaries 


 





Subsidiaries of the Company


 


		(1)	Helios and Matheson Global Services Private Limited, a corporation incorporated under the laws
of India (“Helios India”), of which the Company owns 99.99% of the outstanding equity and voting power.



 


		(2)	Zone Technologies, Inc., a Nevada corporation (“Zone”), which is a wholly owned
subsidiary of the Company.



 


		(3)	HMNY Zone Loan LLC, a Delaware limited liability company (“NewSub”), which is
a wholly owned subsidiary of the Company.



 


		(4)	MoviePass Inc., a Delaware corporation (“MoviePass”), of which the Company owns
91.8% of the outstanding shares of common stock (excluding options and warrants of MoviePass).



 


		(5)	MoviePass Ventures, LLC, a Delaware limited liability company, which is a wholly owned subsidiary
of the Company.



 


		(6)	MoviePass Entertainment Holdings Inc., a Delaware corporation, which is a wholly owned subsidiary
of the Company.



 


		(7)	MoviePass Films LLC, a Delaware limited liability company (“MoviePass Films”),
of which the Company owns 51% of its outstanding membership interests.



 


Subsidiaries of Movie Pass Films


 


		(1)	The Row 2 LLC, a Delaware limited liability company.



 


		(2)	Maleficia LLC, a Delaware limited liability company.



 





		(3)	10 Minutes Gone LLC, a Delaware limited liability company.






 


		(4)	Axis Sally LLC, a Delaware limited liability company (“Axis Sally”).



 





		(5)	Eternity Movie LLC, a Delaware limited liability company.



 





		(6)	Swipe Right Film LLC, a Delaware limited liability company.



 


		(7)	The Long Night LLC, a Delaware limited liability company.



 





		(8)	MoviePass Air LLC, a Delaware limited liability company, which is currently a wholly owned subsidiary
of the Company and is in the process of becoming a subsidiary of MoviePass Films.



 








		(9)	Georgia Film Fund 79, LLC, a Delaware limited liability company.






 





The items set forth on Schedule 3.1(o)
of these Disclosure Schedules are incorporated herein by reference.


 




    Sch-2 


     


    


 


Schedule 3.1(g)


 


Capitalization


  


As of the date hereof, the authorized capital
stock of the Company consists of (A) 5,000,000,000 shares of Common Stock, of which 2,001,541,260 shares are issued and outstanding
as of March 20, 2019, and (B) 2,000,000 shares of preferred stock, $0.01 par value, of which 20,500 shares of the Company’s
Series A Preferred Stock, $0.01 par value, are issued and outstanding as of the date hereof.


  





	 	 	 Common Stock 	 
	Name of Affiliate	 	 Amount and Nature of Beneficial Ownership(1) 	 
	Named Executive Officers and Directors	 	 	 
	Theodore Farnsworth	 	 	9,960	(2)
	Stuart Benson	 	 	-	(3)
	Muralikrishna Gadiyaram	 	 	9,294	(4)
	Prathap Singh	 	 	160	(5)
	Gavriel Ralbag	 	 	160	(5)





 


	(1)	Unless otherwise noted, each person named in the table below has sole voting and investment power
with regard to all shares beneficially owned, subject to applicable community property laws.  




	(2)	This amount includes 1,000 shares of Common Stock issuable within 60 days, subject to entry into
applicable award agreements.  This amount does not include 8,213 shares of Common Stock that have been approved for issuance
to Mr. Farnsworth in conjunction with the execution of his employment agreement, but have not yet been approved by the Company’s
stockholders, as required by Nasdaq Listing Rule 5635(c).




	(3)	Does not include 4,000 shares of Common Stock that have been approved for issuance to Mr. Benson
in conjunction with the execution of his employment agreement, but have not yet been approved by the Company’s stockholders,
as required by Nasdaq Listing Rule 5635(c).




	(4)	Includes (i) 2,750 shares held by Helios & Matheson Information Technology Ltd. and (ii) 3,544
shares held by Helios Matheson Inc., over which Mr. Gadiyaram holds shared voting and investment control.




	(5)	Each of the Company’s independent directors received a grant of 160 shares as payment for
services rendered as a director during 2017.  The shares of Common Stock have not yet been issued.





 






    Sch-3 


     


    

 





		(1)	On October 4, 2018, the Company entered into that certain October 2018 Amendment and Exchange Agreement
with Hudson Bay Master Fund Ltd. (the “October Exchange Agreement”), pursuant to which Hudson Bay Master Fund
Ltd. has the right to participate in the transactions contemplated by the Transaction Documents. The Company incorporates herein
by reference the information included at Item 1.01 of, and Exhibit 10.1 to, the Current Report on Form 8-K filed with the Commission
on October 4, 2018.



 


		(2)	As partial payment for services received from Palladium Capital Advisors, LLC (“Palladium”),
the Company has issued to Palladium warrants to purchase up to 29,364 shares of Common Stock.



 


		(3)	The Company has issued in public offerings in December 2017, February 2018 and April 2018, warrants
to purchase up to 50,886 shares of Common Stock.



 


		(4)	The Company has issued to Oath Inc. warrants to purchase up to 10,201 shares of Common Stock.



 


		(5)	MoviePass has issued outstanding options exercisable for an aggregate amount of 68,205,603 shares
of common stock of MoviePass.



 


		(6)	There are 16,000 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 the Company issued to
MoviePass upon the closing of the Securities Purchase Agreement, dated August 15, 2017, between the Company and MoviePass.



  


		(7)	On April 15, 2018, the Company’s Board of Directors authorized the issuance of 2,000 shares
of common stock to Helios & Matheson Information Technology Ltd., an Indian corporation and former parent company of the Company
(“HMIT”), in consideration for a 12-month lockup agreement on all of HMIT’s shares ending April 15, 2019.



 


		(8)	The Company’s Board of Directors authorized the issuance of 18,545 shares of Common Stock
to various directors, officers, employees and consultants for services rendered to the Company.



 


		(9)	On April 19, 2018, the Company entered into an underwriting agreement with Canaccord Genuity Inc.
pursuant to which the Company agreed to issue and sell to the underwriters in a best-efforts underwritten public offering of up
to approximately $30 million in gross proceeds of securities of the Company including (A) 10,500,000 Series A-2 units, with each
Series A-2 unit consisting of (i) one share of the Company’s common stock, and (ii) one Series A-2 warrant to purchase one
share of common stock (the “Series A-2 Warrants”) and (B) 500,000 Series B-2 units, with each Series B-2 unit
consisting of (i) one share of the Company’s common stock, and (ii) one Series B-2 warrant to purchase one share of common
stock. The Series A-2 Warrants also include “full ratchet” anti-dilution protection provisions, which provide that
if the Company issues any shares of common stock at a price less than the then current exercise price of the Series A-2 Warrants,
or if the Company issues 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-2 Warrants, then the exercise price of the Series
A-2 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 Company incorporates herein by reference the
information included at Item 1.01 of the Current Report on Form 8-K filed with the Commission on April 19, 2018.



 






    Sch-4 


     


    

 


		(10)	On October 4, 2018, pursuant to the October Exchange Agreement, the Company issued to Hudson Bay
Master Fund Ltd. a Senior Note in an aggregate principal amount of approximately $20.4 million, which contains redemption or similar
provision, and a participation right by Hudson Bay Master Fund Ltd. The Company incorporates herein by reference the information
included at Item 1.01 of, and Exhibit 4.1 to, the Current Report on Form 8-K filed with the Commission on October 4, 2018.



 


		(11)	On December 18, 2018, pursuant to December 2018 Amendment and Exchange Agreements between the Company
and each of certain institutional investors, the Company issued Series B Senior Notes to such institutional investors in an aggregate
principal amount of approximately $11.3 million, which contain redemption or similar provisions. The Company incorporates herein
by reference the information included at Item 1.01 of, and Exhibit 4.1 to, the Current Report on Form 8-K filed with the Commission
on December 18, 2018.



 


		(12)	On June 21, 2018, the Company issued 20,500 shares of Series A Preferred Stock, par value $0.01,
of the Company, and such shares of Series A Preferred Stock contain redemption or similar provisions. The Company incorporates
herein by reference the information included at Item 1.01 of, and Exhibit 3.1 to, the Current Report on Form 8-K filed with the
Commission on June 21, 2018.



 


		(13)	On January 16, 2019, the Company entered into Stock Purchase Agreements with certain institutional
investors for the issuance and sale of securities, consisting of 333,333,334 Common Units (the “Common Units”),
with each Common Unit consisting of (a) one share (a “Share”) of the Company’s Common Stock, (b) a Series
C Warrant to purchase one Share, (c) a Series D Warrant to purchase one Share, and (d) a Series E Warrant to purchase one Share
(the “January 2019 Offering”). On January 16, 2019, the Company also issued to the placement agent in the January
2019 Offering warrants to purchase up to 8.0% of the aggregate amount of shares of Common Stock sold in the January 2019 Offering,
or up to 26,666,667 shares of Common Stock, determined by dividing the gross proceeds of the January 2019 Offering by the Common
Unit offering price. The Company incorporates herein by reference the information included at Item 1.01 and Item 9.01 of the Current
Report on Form 8-K filed with the Commission on January 16, 2019.



 






    Sch-5 


     


    

 


Schedule 3.1(i)


 


Material Changes; Undisclosed Events;
Liabilities or Developments


 


The items set forth on Schedule 3.1(r)
of these Disclosure Schedules related to the issuances of equity securities to any officer, director or affiliate are incorporated
herein by reference.


 


On January 11, 2019, MoviePass Entertainment
Holdings Inc. confidentially submitted a Draft Registration Statement on Form DRS to the Commission. On February 22, 2019, MoviePass
Entertainment Holdings Inc. received a comment letter from the Commission with 13 comments on the Form DRS.


 









    Sch-6 


     


    

 


Schedule 3.1(j)


 


Litigation


  


		(1)	On August 2, 2018, Jeffrey Chang, acting on behalf of himself and a putative class of persons who
purchased or otherwise acquired the Company’s common stock between August 15, 2017, and July 26, 2018, filed a class action
complaint in the U.S. District Court for the Southern District of New York against the Company and two of its executive officers,
Theodore Farnsworth and Stuart Benson. Jeffrey Chang v. Helios and Matheson Analytics Inc., et. al., Case No. 1:18-cv-6965.
On August 13, 2018, Jeffrey Braxton, acting on behalf of himself and a putative class of persons who purchased or otherwise acquired
the Company’s common stock between August 15, 2017, and July 26, 2018, filed a class action complaint in the U.S. District
Court for the Southern District of New York against the Company and two of its executive officers, Theodore Farnsworth and Stuart
Benson. Jeffrey Braxton v. Helios and Matheson Analytics, Inc. et al., Case No. 1:18-cv-07242-UA. On November 16, 2018,
the Court consolidated the two actions, appointed a group as lead plaintiffs and appointed Levi & Korsinsky as lead counsel
for the putative class. On January 4, 2019, the lead plaintiffs filed a consolidated amended complaint against the Company, Theodore
Farnsworth, Stuart Benson, and Mitchell Lowe (the “Consolidated Complaint”). The Consolidated Complaint alleges,
among other things, that the Company’s statements to the market were materially false or misleading because the Company allegedly
represented that it would continue to experience substantial growth, and that its business model was sustainable. The plaintiffs
assert claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5. On February 25, 2019, the Defendants filed a motion
to dismiss the Consolidated Complaint with prejudice.



  


On September 20, 2018, Yu Chen,
a purported stockholder of the Company, filed a complaint in the Supreme Court of the State of New York, County of New York, derivatively
on behalf of the Company against Theodore Farnsworth, Stuart Benson, Muralikrishna Gadiyaram, Prathap Singh, Gavriel Ralbag, and
Carl Schramm, and the Company as a nominal defendant (Index No. 654686/2018). The complaint alleges claims for breach of fiduciary
duty and unjust enrichment against the individual defendants. The plaintiff has agreed to stay the action pending a decision on
an anticipated motion to dismiss the Consolidated Complaint.


  


On November 29, 2018, Timour
Prokpiev, a purported stockholder of the Company, filed a substantially similar complaint in the Supreme Court of the State of
New York, County of New York against the same defendants as in the Chen case asserting similar claims (Index No. 655939/2018).
The Prokpiev and Chen cases have been consolidated and are subject to a stipulated stay pending the earlier of 30
days after the entry of an order denying any part of the motion to dismiss the securities class action related to the Consolidated
Complaint referenced above, or a final order dismissing such securities class action with prejudice. On January 14, 2019, David
J. Lichter, a purported stockholder of the Company, filed a complaint in the Supreme Court of the State of New York, County of
New York derivatively on behalf of the Company against the same defendants as in the Chen case (with the exception of Mr. Schramm)
for breach of fiduciary duty, unjust enrichment, and abuse of control (Index No. 650275/2019). It is anticipated that the Lichter
case will become part of the referenced stipulation regarding a stay, but that has not been formally agreed to as of the date
hereof.


 






    Sch-7 


     


    

 


		(2)	On February 23, 2018, MoviePass filed a patent infringement complaint against Sinemia, Inc. in
United States District Court, Central District of California. The complaint asserts infringement of two U.S. patents, U.S. Patent
Nos. 8,484,133 (“Secure targeted personal buying/selling method and system”) and 8,612,325 (“Automatic authentication
and funding method”) by Sinemia, Inc.’s movie-ticket subscription service MoviePass’ complaint requests damages
and an injunction. On October 29, 2018, Sinemia, Inc. filed a motion to dismiss MoviePass’ complaint, and the parties are
awaiting the court’s decision with respect to such motion. A case management conference that was scheduled for March 18,
2019, has been postponed to April 2019.



 


		(3)	On November 21, 2018, Jackie Tabas and Katherine Rosenberg-Wohl, acting on behalf of themselves
and all others similarly situated, filed a class action complaint in the U.S. District Court for the Northern District of California
against MoviePass, the Company and three of their executive officers, Theodore Farnsworth, Stuart Benson and J. Mitchell Lowe (the
“November 21, 2018 Complaint”). Jackie Tabas and Katherine Rosenberg-Wohl v. MoviePass Inc., et. al., Case No.
3:18-cv-7087. The November 21, 2018 Complaint alleges, among other things, breach of contract by MoviePass, failure to disclose
certain terms of service under Section 17602 of the California Business and Professions Code, and violations of the California
Consumers Legal Remedies Act, the California False Advertising Law, the California Unfair Competition Law and the Racketeer Influenced
and Corrupt Organizations Act. The November 21, 2018 Complaint also alleges claims of quantum meruit and unjust enrichment
and inducement to breach contracts. Plaintiffs amended the November
21, 2018 Complaint on February 15, 2019 (the “First Amended Complaint”), dropping the claims of Plaintiff Rosenberg-Wohl
following an individual settlement, and asserting the same claims made by Plaintiff Tabas in the November 21, 2018 Complaint on
behalf of five new Plaintiffs: Linda Hobbs, Tim Samartino, Barbara Sjodahl, Patricia Dawn Walker, and Cheryl Whelan. Pursuant to
an agreement between the parties tolling the running of the statutes of limitation on Plaintiffs’ claims, Plaintiffs also
dropped the claims that had been previously asserted against Messrs. Farnsworth, Benson and Lowe. On March 8, 2019, MoviePass and
the Company moved to compel arbitration of all of the claims asserted in the First Amended Complaint on an individual basis. That
motion is currently being briefed by the parties, and all further proceedings have been stayed while the motion is pending.



 


		(4)	The Company has received demand letters dated February 23, 2017 and March 9, 2017 on behalf of
certain minority stockholders. There has been no further correspondence.



  


		(5)	The Company maintains an e-mail address for investors who wish to contact the Company. The Company
has received emails from alleged shareholders complaining about the decline in the market price of the Common Stock.



 


		(6)	On December 19, 2018, the Company received a written notice from the Nasdaq Listing Qualifications
Department (the “Staff”) that the Company has not regained compliance with the minimum bid price requirement
for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). As a result, Nasdaq determined that
unless the Company timely requested an appeal of such determination before the Nasdaq Hearings Panel (the “Panel”),
the Company’s common stock would be scheduled for delisting from The Nasdaq Capital Market and would be suspended at the
opening of business on December 28, 2018. The Company timely appealed the delisting notice and appeared in front of the Panel on
January 31, 2019. The Panel issued a decision on February 11, 2019, and determined to delist the Company’s common stock from
The Nasdaq Capital Market. The suspension of trading in the Company’s common stock on the Nasdaq Capital Market became effective
at the open of business on February 13, 2019. The Panel has also informed the Company that Nasdaq will complete the delisting by
filing a Form 25 Notification of Delisting with the Commission, after the applicable appeals periods have lapsed. In accordance
with Nasdaq’s Listing Rules, the Nasdaq Listing and Hearing Review Council may, on its own motion, determine to review any
Panel decision within 45 calendar days after the issuance of such decision. However, an appeal or review of the Panel’s decision
would not stay the suspension of trading in the Company’s securities on The Nasdaq Capital Market.



 






    Sch-8 


     


    

 


		(7)	On February 1, 2019, Lawrence Weinberger and his wife, Laurie Weinberger, acting on behalf of themselves
and all others similarly situated, filed a class action complaint in the U.S. District Court for the Southern District of New York
against MoviePass (the “February 1, 2019 Complaint”). Lawrence Weinberger and Laurie Weinberger v. MoviePass
Inc., Case No. 1:19-cv-01039. The February 1, 2019 Complaint alleges, among other things, breach of contract and of the implied
covenant of good faith and fair dealing by MoviePass, and violations of Sections 349(b) and 350 of the New York General Business
Law, prohibiting deceptive and misleading conduct and false advertising in consumer transactions.



 


		(8)	On March 5, 2019, certain defendants, including MoviePass Films, received a Demand for Arbitration
before the Independent Film & Television Alliance (IFTA Arbitration No. 17-64) from Baker Entertainment, LLC and Baker Film
Fund, LLC relating to a bridge loan agreement between Baker Film Fund, LLC and Georgia Film Fund Twenty-Nine, LLC.



  


		(9)	On June 3, 2015, a complaint was filed in the United States District Court for the Central District
of California, case 2:15-cv-04170-BRO-JEM, by Mike Jones, derivatively on behalf of Medbox, Inc., against Guy Marsala, J. Mitchell
Lowe (who is currently the Chief Executive Officer of MoviePass), Ned Siegel, Jennifer S. Love, C. Douglas Mitchell, Pejman Vincent
Mehdizadeh, Matthew Feinstein, Bruce Bedrick and Thomas Iwanski, and Medbox, Inc., as a nominal defendant (the “Federal
Derivative Action”). The complaint generally alleged, among other things, breaches of fiduciary duties and abuse of control
that resulted in damage to Medbox, Inc. Additionally, the following related derivative actions were also filed asserting similar
claims: (1) plaintiff Michael A. Glinter filed a complaint in the Superior Court of California County, Los Angeles County on February
20, 2015, Case No. BC-573314; (2) plaintiff Robert J. Calabrese filed a complaint in Nevada federal court on March 10, 2015, Case
No. 3:15-cv-00147; (3) plaintiff Tyler Gray filed a complaint in Nevada federal court on March 27, 2015, Case No. 3:15-cv-00185;
(4) plaintiff Patricia Des Groseilliers filed a complaint in Nevada federal court on May 20, 2015, Case No. 15-cv-00270; (5) plaintiff
Jennifer Scheffer filed a complaint in Nevada state court on February 12, 2015, Case No. A-15-713877-B; and (6) plaintiff Kimberly
Freeman filed a complaint in Nevada state court on July 20, 2015, Case No. A-15-721731 (collectively, with the Federal Derivative
Action, the “Shareholder Derivative Litigation”). On March 3, 2017, the United States District Court for the
Central District of California entered a judgment approving a settlement of the Shareholder Derivative Litigation as set forth
in the Stipulation and Agreement of Settlement dated December 17, 2015, and dismissed the Shareholder Derivative Litigation with
prejudice, without any admission of wrongdoing or liability of the defendants with respect to the alleged claims. On March 3, 2017,
the court also approved payment of fees and expenses to the plaintiffs’ counsels in the form of $297,241.41 in cash and the
transfer of 2,000,000 shares of common stock and 300,000 shares of common stock of Medbox, Inc. from defendants Mehdizadeh and
Bedrick, respectively, to the plaintiffs’ counsels. In addition, the court approved a service award for $1,500 for each of
the plaintiffs, to be paid from the fees and expenses awarded to the plaintiffs’ counsels.



 




    Sch-9 


     


    

  


Schedule 3.1(k)


 


Labor Disputes


 


The Company and its Subsidiaries have terminated
certain employees and certain employees have terminated their employment. Negotiations over severance and release agreements are
ongoing with certain former employees. There can be no assurance that a severance and release agreement will be reached with each
terminated employee, and therefore labor disputes may exist with respect to terminated employees who do not execute a severance
and release agreement.


 




    Sch-10 


     


    

  


Schedule 3.1(o)


 


Title to Assets


  


The Company and its Subsidiaries have incurred the following
Liens:


 


	Debtor 	Secured Party(ies)	Filing Jurisdiction	Filing Number	Filing Date	Status
	MoviePass	Employment Development Department	SOS California	Initial: 177620328490	12/06/2017	Active
	MoviePass 	Company	SOS Delaware	Initial: 2017 7861026	11/28/2017	Active
	MoviePass Films	SMC Specialty Finance, LLC	SOS Delaware	Initial: 2018 7700566	11/07/2018	Active
	MoviePass Films 	City National Bank	SOS Delaware	Initial: 2018 6299503	09/12/2018	Active
	MoviePass 	State of California	Sacramento County Court (RD), California	Initial: 201810220104	10/22/2018	Active
	MoviePass 	City of New York	New York	Initial: 3764255	08/28/2018	Active
	MoviePass 	State of California	Sacramento County Court (RD), California	Initial: 201709070301	09/07/2017	Active
	MoviePass 	State of California	Sacramento County Court (RD), California	Initial: 201707110234	07/11/2017	Active
	MoviePass 	West World Media LLC	New York Civil Court of the City of New York	Initial: CV00768914NY	05/22/2014	Active
	Georgia Film Fund 79, LLC	Screen Actors Guild-American Federation of Television and Radio Artists 	SOS Delaware	Initial: 2018 5862087	08/24/2018	Active
	Georgia Film Fund 79, LLC	City National Bank	SOS Delaware	Initial: 2018 5114307	07/25/2018	Active
	10 Minutes Gone, LLC	Film Finances, Inc.	SOS Delaware	Initial: 2018 6405571	09/17/2018	Active
	10 Minutes Gone, LLC	Grindstone Entertainment Group, LLC	SOS Delaware	Initial: 2018 5975442	08/29/2018	Active
	10 Minutes Gone, LLC	Screen Actors Guild – American Federation of Television and Radio Artists 	SOS Delaware	Initial: 2018 5861998	08/24/2018	Active
	
        10 Minutes Gone, LLC

        Ten Minutes Gone, LLC
	City National Bank	SOS Delaware	
        Initial: 2018 5114323

        Amendment: 2018 6264358
	07/25/2018	Active


 


In addition, MoviePass Films and its subsidiaries
incur Liens in the ordinary course of their respective businesses for the purposes of obtaining production financing of their films.


 




    Sch-11 


     


    

 


Schedule 3.1(r)


 


Transactions with Affiliates


  


		(1)	On April 15, 2018, the Company’s Board of Directors authorized the issuance of 2,000 shares
of common stock to HMIT, in consideration for a 12-month lockup agreement on all of HMIT’s shares ending April 15, 2019.



 


		(2)	Since October 1, 2017, the Company has been paying the rent on an apartment in New York City for
Mr. Farnsworth, a resident of Florida. In 2017, the amount of rent paid totaled $17,550.



 


		(3)	On August 10, 2017, the Company’s Board of Directors approved the issuance of 2,000 shares
of the Company’s common stock to each of Mr. Gadiyaram and Mr. Farnsworth. The Company’s stockholders approved the
issuance of the shares on October 27, 2017. The shares became fully earned on December 11, 2017, upon the closing of the acquisition
of the majority stake in MoviePass.



 


		(4)	On January 20, 2017, the Company’s Board of Directors approved individual employee benefit
plans (the “Executive Plans”) for Theodore Farnsworth, Pat Krishnan and Muralikrishna Gadiyaram. Pursuant to
the Executive Plans, the Company has agreed to issue 1,000 unregistered shares of common stock to each of these individuals as
a bonus for exceptional services provided in connection with the Company’s merger transaction with Zone. The Company incorporates
herein by reference the information included at Item 1.01 of the Current Report on Form 8-K filed with the Commission on January
23, 2017.
	 	 	 



		(5)	In the fiscal years ended December 31, 2016 and 2015, both the Company and Helios India received
services and/or provided services to subsidiaries of HMIT, including Jayamaruthi Software Systems Pvt. Ltd., Maruthi Consulting
Inc. and Helios and Matheson IT (Bangalore) Ltd. During the period from January 1, 2017 through April 30, 2017, the Company reimbursed
Maruthi Consulting Inc. for health insurance premiums in the amount of $1,561.37.



 


		(6)	The Company determined to provide for a reserve in its September 30, 2015 and December 31, 2015
financial statements in the amount of $2.3 million due to an uncertainty relating to the ability of its former parent, HMIT, to
(i) return the security deposit held by HMIT in connection with a memorandum of understanding entered into in September 2010 and
(ii) pay approximately $344,000 in reimbursable expenses and advances pursuant to a professional service agreement entered into
in August 2014. On January 21, 2016, HMIT became subject to a liquidation order by an Indian court resulting from creditors’
claims against HMIT. On February 15, 2016, the High Court of Judicature at Madras (Civil Appellate Jurisdiction) issued an order
of interim stay of the liquidation order. HMIT continues to await a decision from the High Court of Judicature relating to this
matter. If HMIT becomes subject to liquidation, the Company would likely not be able to collect the full amounts reserved by the
Company.



 




    Sch-12 


     


    

 


Schedule 3.1(y)


 


Disclosure


  


On March 11, 2019, the board of directors
of the Company and the audit committee of the Company, following discussions with management, determined that the Company’s
previously issued quarterly and year-to-date unaudited consolidated financial statements for September 30, 2018, should no longer
be relied upon. Similarly, related press releases, earnings releases, and investor communications describing the Company’s
financial statements for these periods should no longer be relied upon. The Company incorporates herein by reference the information
included at Item 4.02 of the Current Report on Form 8-K filed with the Commission on March 12, 2019, and in the Form 10-Q amendment
filed with the Commission on March 19, 2019.


 




    Sch-13 


     


    

  


Schedule 3.1(z)


 


Indebtedness


  


		(1)	On October 4, 2018, pursuant to the October Exchange Agreement, the Company issued to Hudson Bay
Master Fund Ltd. a Senior Note in an aggregate principal amount of approximately $20.4 million. The Company incorporates herein
by reference the information included at Item 1.01 of, and Exhibit 4.1 to, the Current Report on Form 8-K filed with the Commission
on October 4, 2018.



 


		(2)	On December 18, 2018, pursuant to December 2018 Amendment and Exchange Agreements between the Company
and each of certain institutional investors, the Company issued Series B Senior Notes to such institutional investors in an aggregate
principal amount of approximately $11.3 million. The Company incorporates herein by reference the information included at Item
1.01 of, and Exhibit 4.1 to, the Current Report on Form 8-K filed with the Commission on December 18, 2018.



 


		(3)	On December 11, 2017, the Company issued to MoviePass a subordinated convertible promissory note
in the principal amount of $12 million which will convert automatically, upon the Company’s receipt of approval from its
stockholders in accordance with Nasdaq Listing Rule 5635, into 16,000 unregistered shares of the Company’s common stock.
On December 11, 2017, the Company also issued to MoviePass a promissory note in the principal amount of $5 million. The Company
incorporates by reference the information included at Item 1.01 of the Current Report on Form 8-K filed with the Commission on
December 11, 2017.



 


		(4)	On November 22, 2017, the Company entered into a commercial guaranty in favor of PayPal, Inc. (“PayPal”)
pursuant to which the Company agreed to guarantee the payment obligations of MoviePass to PayPal under a payment services agreement
by and between PayPal and MoviePass. The Company incorporates by reference the information included at Item 1.01 of the Current
Report on Form 8-K filed with the Commission on November 24, 2017.



 


		(5)	Zone issued a promissory note to NewSub, dated September 7, 2016, as amended by the Amendment dated
October 25, 2016, in the aggregate principal amount of $1,113,305. In connection with this indebtedness, a UCC Financing Statement
has been filed in Nevada to reflect NewSub’s security interest in certain collateral of Zone.



 


		(6)	The Company has guaranteed the payment obligations of MoviePass to salesforce.com under that certain
Master Subscription Agreement by and between salesforce.com and MoviePass in the aggregate amount of $860,000.



 


		(7)	The Company has guaranteed the payment obligations of MoviePass to Zuora, Inc. under that certain
Zuora Master Subscription Agreement, dated July 31, 2018, by and between Zuora, Inc. and MoviePass in the aggregate amount of $500,000.



 


		(8)	The Company has guaranteed the payment obligations of MoviePass to Worldpay, LLC under that certain
Bank Card Merchant Agreement by and between Worldpay, LLC and MoviePass in the aggregate amount of $1,200,000.



 






    Sch-14 


     


    

 


		(9)	On August 31, 2018, Axis Sally, River Bay Films, LLC (the “Lender”) and Emmett
Furla Oasis Films LLC (“EFO”), entered into a Development Loan Agreement (the “Axis Sally Loan Agreement”).
The Lender is not related to the Company, any of its Subsidiaries or any of their respective Affiliates. Pursuant to the Axis Sally
Loan Agreement, the Lender loaned MoviePass Films $1,600,000 for payment of production expenses relating to the film Axis Sally,
starring Al Pacino. The Lender funded the loan as follows: $600,000 on execution, and the remaining $1,000,000 on the Lender’s
receipt of repayment of a separate loan from the Lender to EFO and/or Georgia Film Fund 79, LLC (an affiliate of EFO), for the
film 10 Minutes Gone made on February 26, 2018. The loan repayment amount is $1,945,000, which includes principal and $345,000
interest. The loan maturity date is January 15, 2019, with late penalties assessed as follows: 5% if repaid within 90 days after
the maturity date; and an additional 5% penalty applies if repayment is made after 90 days after the maturity date. Pursuant to
the Axis Sally Loan Agreement, EFO has unconditionally guaranteed MoviePass Films’ payment obligations to the Lender.



 


		(10)	On September 10, 2018, MoviePass Films entered into a note payable for $7.2 million with annual
interest equal to either (a) 3.5% plus the prime rate plus 0.25% or (b) the greater of (i) 3.5% and (ii) the LIBOR rate plus 2.75%.
The note can be prepaid at any time without penalty through the earlier of the abandonment of the production of the 10 Minutes
Gone films or March 15, 2020.



 


		(11)	MoviePass Films has entered into notes payable in connection with the financing of certain film
productions, as set forth in the Form 10-Q amendment filed with the Commission on March 19, 2019, relating to the restatement of
the financial statements contained therein, which is incorporated herein by reference.



 




    Sch-15 


     


    

 


Schedule 3.1(aa)


 


Tax Status


  


The items set forth on Schedule 3.1(o)
of these Disclosure Schedules are incorporated herein by reference.


 




    Sch-16 


     


    

 


Schedule 4.6


 


Use of Proceeds


  


The Company will use approximately $870,000
of the net proceeds from the sale of the Preferred Stock and Warrants to redeem a portion of outstanding non-convertible senior
notes that issued by the Company on October 4, 2018 and December 18, 2018 (the “Senior Notes”), and the remaining
proceeds for general corporate purposes of the Company and its Subsidiaries and transaction expenses.


 


Sch-17