Helios & Matheson North America (HMNY) Risk Analysis

As of November 9, 2018, we had 1,612,561,916 shares of common stock issued and outstanding and the closing sale price of our common stock on November 14, 2018 was $0.017. The issuances of convertible notes in December 2016 and the February 2017 Notes, the August 2017 Notes, the November 2017 Notes, the January 2018 Notes and the June 2018 Convertible Notes (collectively, the "Notes") and the subsequent transactions, resulted in a high volume of activity for our securities. We may engage in similar transactions, which transactions may include registration rights. The issuance of such additional securities and the potential for high volume trades of our common stock in connection with these financings may continue to have a downward effect on our market price. In addition, in connection with the Notes, we issued five-year warrants to a financial advisor, of which 6,381 (1,595,250 pre-split) are currently exercisable, and warrants in public offerings, of which 61,087 (16,117,000 pre-split) are currently exercisable. Future issuance of our common stock upon exercise of these warrants may have a further negative impact on our stock price. Further, as of November 14, 2018, as a result of the issuance of the November 2017 Notes and, the January 2018 Notes, 2.8billion shares of our common stock may be issuable upon conversion of such outstanding debt. Further, this number of shares may increase significantly if there are further conversion price reductions resulting from the full ratchet conversion price adjustment provisions of the November 2017 Notes and the January 2018 Notes, which provide that if we issue securities in certain transactions at a price lower than the applicable conversion price of the November 2017 Notes and the January 2018 Notes, then the applicable conversion price of the November 2017 Notes and the January 2018 Notes, will be reduced to equal such lower price, resulting in additional shares issuable upon conversion of the November 2017 Notes and the January 2018 Notes. As of November 14, 2018, the Company owes approximately $262,471 of make-whole interest under the November 2017 Notes and the January 2018 Notes. As such, all of the shares noted above represent shares issuable upon conversion of restricted principal under such convertible debt for which an equivalent amount owed to us under the corresponding investor notes has not yet been paid. Such restricted principal may not, as of the date of this Quarterly Report on Form 10-Q, be converted into any shares of our common stock. However, if holders of these convertible Notes provide additional payments to us under the corresponding investor notes, an amount equal to such payment will become unrestricted principal under these convertible notes that may be converted to our common stock at the election of the holders of these Notes. The issuance of shares we are obligated to issue and the issuance of shares we may issue in connection with conversion or exercise of our outstanding convertible instruments may result in a higher volume trading of our securities, which may increase dilution of existing investors and further depress the market price of our common stock, which may negatively affect our stockholders' equity and our ability to raise capital on terms acceptable to us in the future.