Helios and Matheson Analytics (HMNY) DEFA14A Additional proxy soliciting materials

Exhibit 99.3

Unaudited Pro Forma Condensed Combined Financial Information

On November 9, 2016 the Company merged with Zone Technologies Inc. (“Zone”) and issued 1,740,000 shares of its common stock as merger consideration which represented an exchange ratio of 0.174 shares of the Company’s common stock for each share of Zone common stock outstanding with Zone surviving the merger as the Company’s wholly-owned subsidiary. The Company has included pro forma information for Zone within the year ended December 31, 2016 statements of operations to reflect Zone pre acquisition activity for the period of January 1, 2016 through November 8, 2016.

On August 15, 2017 the Company and MoviePass Inc., a privately held Delaware corporation (“MoviePass”), entered into a securities purchase agreement (the “MoviePass SPA”), pursuant to which the Company agreed to purchase shares of common stock of MoviePass equal to 51% of the then outstanding shares of MoviePass’ common stock for an aggregate purchase price of up to $27,000,000 (the “MoviePass Transaction”). At the closing, and for the purpose of this acquisition, all of MoviePass’ investor debt and accrued interest are converted into one class of common stock.

On October 6, 2017, the Company and MoviePass amended the MoviePass SPA in connection with an additional loan made by the Company to MoviePass in the amount of $6,500,000. Of the loan amount, $1,500,000 will be allocated, upon the completion of the MoviePass Transaction, to the purchase of additional shares of the then-outstanding MoviePass common stock. As a result of the additional investment, the maximum purchase price payable by the Company increased from $27,000,000 to $28,500,000. Upon the closing of the MoviePass Transaction, the Company will receive shares of common stock of MoviePass totaling 51.71% of the then-outstanding shares of MoviePass common stock, in addition to shares of MoviePass common stock issuable upon conversion of the Kelly Note (as defined in the MoviePass SPA) amounting to 2% of the outstanding shares of MoviePass common stock on a post-transaction basis, for a total ownership percentage of 53.71%.

On October 11, 2017, the Company and MoviePass entered into an investment option agreement (the “Option Agreement”), pursuant to which the Company was granted an option to purchase additional shares of MoviePass common stock in an amount up to $20,000,000 based on a pre-money valuation of MoviePass of $210,000,000 amounting to an additional investment of up to 8.7% of the currently outstanding shares of MoviePass common stock (as defined in the MoviePass Option Agreement), giving effect to the closing of the MoviePass Transaction.

On August 15, 2017, pursuant to a Securities Purchase Agreement entered into by the Company and an institutional investor (“Investor”) the Company agreed to sell and issue Senior Secured Convertible Notes to the Investor in the aggregate principal amount of $10,300,000 and on November 7, 2017, pursuant to a Securities Purchase Agreement entered into by the Company and certain institutional investors, the Company completed an offering of a new series of Senior Convertible Notes in the aggregate principal amount of $100,000,000. The pro forma reflects approximately $27,000,000 of the proceeds received from the notes issued in August 2017 and November 2017 as being used to finance the MoviePass Transaction.

The following unaudited pro forma condensed combined financial information is based on the Company’s historical consolidated financial statements and MoviePass’ historical consolidated financial statements as adjusted to give effect to the proposed acquisition by the Company of a majority financial stake in MoviePass including the financing thereof. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2017 and the 12 months ended December 31, 2016 give effect to the MoviePass Transaction as if it had occurred on January 1, 2016. The unaudited pro forma condensed combined balance sheet as of September 30, 2017 gives effect to the MoviePass Transaction as if it had occurred on September 30, 2017.

The pro forma combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the MoviePass Transaction occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

Unaudited Pro Forma Condensed Combined Statements of Operations

Year Ended December 31, 2016

	Helios and Matheson Analytics Inc.			Zone Technologies, Inc for the period from January 1, 2016 to the November 9, 2016 date of acquisition			Pro forma results adjusted for acquisition of Zone Technologies, Inc			MoviePass			Adjustments			Notes	Combined
Revenues	$	6,759,700		$	-		$	6,759,700		$	8,692,337		$	-			$	15,452,037
Revenues - other		-			-			-			20,212			-				20,212
Total revenues		6,759,700			-			6,759,700			8,712,549			-				15,472,249
Cost of sales		4,860,927			-			4,860,927			9,780,214			-				14,641,141
Cost of sales - other		-			-			-			1,506			-				1,506
Total cost of sales		4,860,927			-			4,860,927			9,781,720			-				14,642,647
Gross margin/(loss)		1,898,773			-			1,898,773			(1,069,171	)		-				829,602
Operating expenses:
General and administrative expenses		3,424,463			1,246,543			4,671,006			3,521,296			-				8,192,302
Research and development		311,266			304,263			615,529			-			-				615,529
Depreciation and amortization		259,379			-			259,379			148,113			2,779,376		3		3,186,868
Total operating expenses		3,995,108			1,550,806			5,545,914			3,669,409			2,779,376				11,994,699
Loss from operations		(2,096,335	)		(1,550,806	)		(3,647,141	)		(4,738,580	)		(2,779,376	)			(11,165,097	)
Other income (expense):
Change in fair value of warrant liability		-			-			-			(1,824	)		(3,755,084	)	7		(3,756,908	)
Change in fair value of derivative liability		(107,249	)		-			(107,249	)		148,482			(5,082,270	)	7		(5,041,037	)
Interest expense		(5,210,413	)		-			(5,210,413	)		(324,443	)		(4,069,244	)	9		(12,520,657	)
								-						(3,241,000	)	8
														324,443		4
Interest income		18,261			-			18,261			-			-				18,261
Total other expense, net		(5,299,401	)		-			(5,299,401	)		(177,785	)		(15,823,155	)			(21,300,341	)
Loss before provision for income taxes		(7,395,736	)		(1,550,806	)		(8,946,542	)		(4,916,365	)		(18,602,531	)			(32,465,438	)
Income tax benefit/(provision)		14,665			-			14,665			-			-				14,665
Net loss		(7,381,071	)		(1,550,806	)		(8,931,877	)		(4,916,365	)		(18,602,531	)			(32,450,773	)
Net loss attributable to noncontrolling interest		-			-			-			-			(2,770,871	)	12		(2,770,871	)
Other comprehensive income/(loss)		13,721			-			13,721			-			-				13,721
Net income attributable to common shareholders	$	(7,367,350	)	$	(1,550,806	)	$	(8,918,156	)	$	(4,916,365	)	$	(15,831,660	)		$	(29,666,181	)
Net loss per share
Basic and Diluted	$	(2.74	)				$	(3.32	)								$	(4.43	)
Weighted average shares		2,691,448						2,691,448						4,000,000		1		6,691,448

Unaudited Pro Forma Condensed Combined Statements of Operations

Nine Months Ended September 30, 2017

	Helios and Matheson Analytics Inc.			MoviePass			Pro Forma Adjustments			Notes	Pro Forma Combined
Revenues	$	3,672,036		$	4,967,689		$	-			$	8,639,725
Revenues - other		-			660			-				660
Total revenues		3,672,036			4,968,349			-				8,640,385
Cost of sales		2,969,357			9,592,336			-				12,561,693
Cost of sales - other		-			20,527			-				20,527
Total cost of sales		2,969,357			9,612,863			-				12,582,220
Gross margin/(loss)		702,679			(4,644,514	)		-				(3,941,835	)
Operating expenses:
General and administrative expenses		8,023,886			5,208,615			-				13,232,501
Research and development		1,555,095			-			-				1,555,095
Depreciation and amortization		1,302,381			86,658			2,084,532		3		3,473,571
Total operating expenses		10,881,362			5,295,273			2,084,532				18,261,167
Loss from operations		(10,178,683	)		(9,939,787	)		(2,084,532	)			(22,203,002	)
Other income (expense):
Change in fair value of warrant liability		(17,038,711	)		1,949			17,325,770		5		(20,674,281	)
								(20,963,289	)	7
Change in fair value of derivative liability		(10,434,611	)		(1,358,977	)		5,893,606		5		(42,955,562	)
								(37,055,580	)	7
Loss on the extinguishment of the December Note		(683,885	)		-			-				(683,885	)
Interest expense		(16,856,284	)		(400,046	)		(2,430,750	)	5		(19,219,159	)
								67,875		5
								400,046		4
Interest income		51,695			-			-				51,695
Total other expense, net		(44,961,796	)		(1,757,074	)		(36,762,322	)			(83,481,192	)
Loss before provision for income taxes		(55,140,479	)		(11,696,861	)		(38,846,854	)			(105,684,194	)
Income tax benefit/(provision)		(39,110	)		-			-				(39,110	)
Net loss		(55,179,589	)		(11,696,861	)		(38,846,854	)			(105,723,304	)
												-
Net loss attributable to noncontrolling interest								(5,030,048	)	12		(5,030,048	)
Other comprehensive income/(loss)		(6,066	)		-			-				(6,066	)
Net income attributable to common shareholders	$	(55,185,655	)	$	(11,696,861	)	$	(33,816,806	)		$	(100,699,322	)
Net loss per share
Basic and Diluted	$	(8.35	)								$	(9.49	)
Weighted average shares		6,607,149						4,000,000		1		10,607,149

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Unaudited Pro Forma Condensed Combined Balance Sheet

Unaudited Pro Forma Condensed Combined Balance Sheet As of September 30, 2017

	Helios and Matheson Analytics Inc.			MoviePass			Pro Forma Adjustments			Notes	Pro Forma Combined
Assets
Current assets:
Cash	$	1,663,879		$	3,341,247		$	(16,000,000	)	1	$	2,955,126
								(20,000,000	)	2
								6,970,000		6
								26,980,000		6
Accounts receivable, net		254,930			273,315			-				528,245
Unbilled receivables		48,595			-			-				48,595
Note receivable - MoviePass		5,000,000			-			(5,000,000	)	1		-
Prepaid expenses		707,868			71,148			-				779,016
Total current assets		7,675,272			3,685,710			(7,050,000	)			4,310,982
Other assets
Property and equipment, net		134,705			40,251			-				174,956
Intagible assets, net		4,915,816			-			11,208,000		1		16,123,816
Goodwill		4,599,969			-			82,958,873		1		92,558,842
								5,000,000		1
Other assets		139,012			8,000			-				147,012
Domain names		-			25,965			-				25,965
Total assets	$	17,464,774		$	3,759,926		$	92,116,873			$	113,341,573
Liabilities and Shareholders' Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses	$	2,481,201		$	2,259,453		$	1,120,910		4	$	5,861,564
Derivative liability		14,670,153			-			35,806,867		5		50,477,020
Accrued interest		57,817			842,696			(842,696	)	1		57,817
Gift card liabilities		-			21,784			-				21,784
Deferred revenue		-			4,257,858			-				4,257,858
Warrant liability		23,952,727			244,748			2,629,162		5		26,826,637
Convertible notes payable		381,244			9,477,188			(34,285,215	)	10		381,244
								6,970,000		6
								26,980,000		6
								335,215		11
								(9,477,188	)	1
Total current liabilities		41,543,142			17,103,727			29,237,055				87,883,924
Long term liabilities
Convertible notes payable		-			8,156,970			(8,156,970	)	1		-
Total liabilities		41,543,142			25,260,697			21,080,085				87,883,924
Commitments and Contingencies
Redeemable common stock, $.01 par value; 841,250 shares issued and outstanding that can be converted to Senior Secured Convertible Notes as of September 30, 2017 for a redemption amount of $2,523,700		2,097,867			-			-				2,097,867
Stockholders' equity (deficit):
Preferred stock		-			2,148			(2,148	)	1		-
Common stock		85,445			1,296			40,000		1		125,445
								(1,296	)	1
Additional paid-in capital, plus Redeemable CS 841,250 Shares		72,445,147			9,128,137			51,720,013		1		108,493,492
								(15,671,668	)	2
								(9,128,137	)	1
Other comprehensive income		(113,057	)		-			-				(113,057	)
Accumulated deficit		(98,593,770	)		(30,632,352	)		30,632,352		1		(104,200,709	)
								(1,456,125	)	4, 5
								(4,150,814	)	5
Total Helios stockholders' equity (deficit)		(26,176,235	)		(21,500,771	)		51,982,177				4,305,171
Non-controlling interest		-			-			23,382,943		1		19,054,611
								(4,328,332	)	2
Total shareholders’ equity (deficit)		(26,176,235	)		(21,500,771	)		71,036,788				23,359,782
Total liabilities, redeemable common stock and shareholders’ equity (deficit)	$	17,464,774		$	3,759,926		$	92,116,873			$	113,341,573

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1 In consideration of the interests, the Company purchased a 53% stake of MoviePass, Inc. which comprised of 666,666 milestone contingent shares of HMNY common stock, 3,333,334 shares of HMNY common stock of share based consideration, and $15,000,000 in cash consideration. At closing, the Company will deliver the remainder of the cash not already prepaid in the form of a convertible note receivable sent to MoviePass prior to the close of the acquisition and the share based consideration. The milestone contingent shares were based upon MoviePass within one year after the Closing, obtaining subscribers to MoviePass’ MoviePass product in excess of at least one day 150,000 subscribers, and the common stock shall have been listed on The Nasdaq Stock Market or New York Stock Exchange by January 31, 2018.  As of September 30, 2017, MoviePass had already achieved the number of daily subscribers and therefore the contingency had been fully satisfied.

Cash and Cash Equivalents	$	15,000,000
Common shares (4,000,000 shares at $0.01 par)		40,000
Note Payable		1,000,000
Additional Paid in Capital (4,000,000 shares at $12.93 per share)		51,720,013
Total Consideration	$	67,760,013
Fair Value of Assets Acquired and Liabilities Assumed
Cash and Cash Equivalents	$	3,341,247
Accounts Receivable, net		273,315
Prepaid expenses		71,148
Property and Equipment		40,251
Other Assets		8,000
Domain names		25,965
Trade Name and Trademarks		2,859,000
Developed Technology		6,555,000
Customer Relationships		1,520,000
Non-Competition Agreements		274,000
Accounts Payable		(1,504,384	)
Accrued Expenses		(755,069	)
Gift Card Liabilities		(21,784	)
Deferred Revenue		(4,257,858	)
Warrant Liability		(244,748	)
Total Fair Value of Assets Acquired and Liabilities Assumed	$	8,184,083
Non Controlling Interest (at Fair Value)	$	23,382,943
Goodwill	$	82,958,873

In preparing the pro forma financial information an estimated expected purchase price was based on its closing market price on the November 17, 2017 of $12.94. In addition, the Company has included the following sensitivity analysis of the purchase price and goodwill to changes in the price of the Company’s common stock.

	Purchase Price		Estimated Goodwill
As presented in the pro forma combined results	$	67,760,013	$	82,958,873
10% increase in common stock price	$	71,836,014	$	87,034,874
10% decrease in common stock price	$	66,760,013	$	81,958,873

	In preparing the pro forma financial information, Management assigned an estimated fair value to the noncontrolling interest. This fair value is based on the estimated value of MoviePass at the time which the acquisition was announced, August 15, 2017. As of August 15, 2017, the original valuation of MoviePass was estimated to be approximately $49,700,000 and the percentage ownership by noncontrolling interest was 47%. The fair value assigned to the noncontrolling interest takes into consideration a premium associated with the controlling interest, in addition to the fair value of the net assets of MoviePass, which resulted in an estimated initial value of $23,400,000
	When assigning a preliminary fair value to the Deferred Revenue of MoviePass, Management noted that upon review of the MoviePass audited financial statements, the costs to satisfy this obligation are at least, if not greater than, the value than the revenue recognized and recorded as deferred. At this time, the final costs to satisfy the obligation are not fully known, therefore Management has recorded Deferred Revenues at the book value, which is deemed to be an appropriate estimate of fair value.
	To record the additional investment of MoviePass purchased by the Company subsequent to the initial 53% acquisition. The additional investment is to acquire an additional 8.7% of MoviePass for $20,000,000 in cash. The additional 8.7% investment results in a reduction to the carrying value of the noncontrolling interest of $4,328,322. The excess of the purchase price of $20,000,000 over the carrying value of the non controlling interest results in an adjustment to Additional Paid in Capital of $15,671,668.
2	To record the additional investment of MoviePass purchased by the Company subsequent to the initial 53% acquisition. The additional investment is to acquire an additional 8.7% of MoviePass for $20,000,000 in cash.

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3 Adjustments represent the amortization expense related to the identifiable intangible assets acquired in MoviePass of $2,779,368 for the year ended December 31, 2016 and $2,084,526 for the nine months ended September 30, 2017. Amortization expense is recognized on a straight line basis over the useful life of the intangible assets.  The useful life of the MoviePass intangible assets are as follows:

Intangible assets	Useful Life
Trade Name and Trademarks		10
Developed Technology		3
Customer Relationships		7
Non-Competition Agreements		3

	To adjust for financing costs related to expenses incurred in conjunction with the MoviePass acquisition. These costs specifically relate to the Company obtaining the financing necessary to complete the acquisition of MoviePass and are considered to be recurring in nature, as they pertain to interest expense, accretion of debt discounts, and gain/loss on warrant and derivative instruments which the Company will continue to incur beyond the date of acquisition.
4	For the 9 months ended September 30, 2017 $32,075,452 costs had been incurred and recorded within  the Company's Statement of Operations and reflected as part of Derivative Liability, Warrant Liability, and Convertible Notes Payable balances on the September 30, 2017 Balance Sheet. Costs reflected within the 9 months ended September 30, 2017 Statement of Operations were reversed and the corresponding interest expense, accretion of debt discounts, and gain/loss on warrant and derivative instruments were instead recorded as if the acquisition occurred on January 1, 2016. Costs reflected within the September 30, 2017 Balance Sheet were adjusted to remove the effects of interest accreted on the convertible notes for the 9 months ended September 30, 2017 as these costs would not have been incurred on the first day of the transaction.
5	To adjust for transaction costs related to expenses incurred in conjunction with the MoviePass acquisition. As these costs specifically relate to accounting and legal expenses and are considered to be non-recurring, Management has determined that they should not be included in the pro forma Statement of Operations presented. As such, for the $1,362,818 of transaction costs recorded within the 9 month ended September 2017 Statement of Operations, an adjustment will be recorded to remove these costs from Interest Expense. For the $1,120,909 of transaction costs incurred after September 30, 2017, an adjustment will be recorded to reflect these expenses within Accrued Expenses and Retained Earnings within the September 30, 2017 Balance Sheet.
6	Adjustment to record debt incurred in conjunction with securing the MoviePass acquisition which was secured subsequent to September 30, 2017.
7	Adjustments represent the change in fair market value of the Company's derivative and warrant liabilities recongized with the additional financing that the Company secured to acquire a majority stake in MoviePass.
8	Adjustment to record interest expense related to the notes issued in August 2017 and November 2017 as being used to finance the MoviePass transaction.
9	Adjustment to record accretion expense related to the discount due to the derivatives incurred in conjunction with the notes issued in August 2017 and November 2017 as being used to finance the MoviePass transaction..
10	Adjustment to record the derivative liability as a discount against the convertible note payable balance.
11	Adjustment to remove the accretion expense recorded in conjunction with the notes issued in August 2017 for the 9 months ended September 30, 2017.
12	Adjustment to net income to record portion attributable to noncontrolling interest. When considering the initial purchase of MoviePass of 53.71%, increased to reflect the additional investment of 8.7%, the total non controlling interest portion amounts to 37.59%.

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