What changed in this filing

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Item 1A. Risk Factors

2013-04-01 compared with 2012-04-16 · 203 added, 259 removed, 211 unchanged (69% of the section changed)

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common stock are speculative and involve a high degree of risk.

Investors should carefully consider the following matters, as well

as the other information in this Annual Report on Form 10-K.

Investors should carefully consider the following matters, as

well as the other information in this Annual Report on Form 10-K.

If any of these risks or uncertainties actually occur, our business,

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We had a loss from

continuing operations of approximately $7.3 million in 2011, $7.1 million in 2010, and $10.9 million

continuing operations before income taxes of approximately $4.4 million and $6.9 million in 2012 and 2011, respectively .

We may incur additional losses in the future.

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Theatre Direct, which

owned our Broadway Ticketing Business, represented a substantial portion of our business until its sale in December 2010 (the “Broadway

Sale”).

As a result, our operating results for any particular period may not accurately predict our future operating results.

Summarized results of our discontinued operations, which include the Broadway Ticketing Business, for 2009, 2010 and 2011 are set

forth in the notes to our financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

owned our Broadway Ticketing Business, represented a substantial portion of our business until its sale in December 2010 (the

“Broadway Sale”).

As a result, our operating results for any particular period may not accurately predict our future

operating results.

Summarized results of our discontinued operations, which include the Broadway Ticketing Business, for 2011

and 2012 are set forth in the notes to our financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Our results of operation

and financial condition may be materially adversely effected if (i) our ability to receive the earn-out payments from the sale

of the Hollywood.com business is inhibited in any way, (ii) our ability to receive any dividends and any other distributions from

MovieTickets.com or Project Hollywood is inhibited in any way, (iii) our ability to receive the payments under the Credit Agreement

or the earn-outs in connection with the Broadway Sale is inhibited in any way, (iv) our ability to exercise or put the Warrant

issued to us in connection with the Broadway Sale is inhibited in any way, or (v) our Ad Sales Division continues to operate at

and financial condition may be materially adversely effected if (i) our ability to receive any dividends and any other distributions

from MovieTickets.com is inhibited in any way, (ii) our ability to receive the payments under the Credit Agreement in connection

with the Broadway Sale is inhibited in any way, or (iii) our ability to exercise or put the Warrant issued to us in connection

with the Broadway Sale is inhibited in any way.

We may not receive

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There can be no assurance that Hollywood Media will receive all of the payments due under the Credit Agreement.

The financial condition

and performance of Key Brand and/or its subsidiaries and the ability of Key Brand and/or its subsidiaries to satisfy the covenants

and obligations in the Credit Agreement (or any other applicable financing agreements) could adversely affect Key Brand’s

ability to satisfy its obligations under the Credit Agreement.

Payments that

we receive under the Credit Agreement may be reduced if certain adverse ticketing regulations are enacted.

From time to time,

state and federal governments consider enacting restrictions or limitations on the amount of service fees that may be charged on

the resale of tickets for events.

For example, before 2007, the State of New York capped the amount of the service fees that could

be charged on the resale of tickets at 20% to 45% of the face value of the ticket, depending on the size of the venue.

the State of New York repealed the cap on service fees for the resale of tickets.

At this time it is unclear what, if any, future

ticketing regulations may be enacted by states or the federal government.

Pursuant to the terms

of the Purchase Agreement and the Credit Agreement, upon any adverse change in state or federal ticketing regulations that takes

effect before December 15, 2012 that restricts or limits the amount of service fees that may be charged on the resale of tickets,

the principal amount of the Credit Agreement will be reduced by the amount of any such reduction in value up to a maximum of $5

million, and such amount shall be added pro-rata to the remaining earn-out amounts payable to Hollywood Media pursuant to the Purchase

Agreement, provided that, there will be no reduction in the amounts due under the Credit Agreement if the entire earn-out has already

been earned at the time of any such adverse change.

We may not receive

earn-out payments.

If Theatre Direct and

its subsidiaries achieve revenues greater than or equal to $125 million in any full fiscal year of Theatre Direct ending during

the period from the closing date of the Broadway Sale until the end of the tenth full fiscal year of Theatre Direct which occurs

after the closing date of the Broadway Sale, then the purchaser, Key Brand, will be obligated to pay us $7 million (plus the applicable

portion of any adjustments under the Credit Agreement relating to the enactment of adverse ticketing regulations).

If Theatre Direct

and its subsidiaries achieve revenues greater than or equal to $150 million in any full fiscal year of Theatre Direct ending during

the period from the closing date of the Broadway Sale until the end of the tenth full fiscal year of Theatre Direct which occurs

after the closing date of the Broadway Sale, then Key Brand will be obligated to pay us an additional amount equal to $7 million

(plus the applicable portion of any adjustments under the Credit Agreement relating to the enactment of adverse ticketing regulations).

R&S Investments, LLC, an entity owned by Mr.

Rubenstein and Ms.

Silvers, is obligated to pay us up to an additional $7.2 million

in potential earn-out payments as of December 31, 2011 pursuant to our sale to it of the Hollywood.com Business.

There can be no

assurance that we will receive all of these earn-out payments.

The financial

condition and performance of Key Brand and/or its subsidiaries and the ability of Key Brand and/or its subsidiaries to satisfy

the covenants and obligations in the Credit Agreement (or any other applicable financing agreements) could adversely affect Key

Brand’s ability to satisfy its obligations under the Credit Agreement.

Key Brand’s

financial performance and condition will impact Key Brand’s ability to satisfy its obligations under the Credit Agreement

pay the earn-out pursuant to the Purchase Agreement, and satisfy its other obligations under the Purchase Agreement.

Key Brand’s financial

performance and condition will impact the purchaser’s, Key Brand’s, ability to finance and grow its business, which

would impact its ability to (i) satisfy its obligations under the Credit Agreement, (ii) pay the earn-out pursuant to the Purchase

Agreement, and (iii) satisfy its other obligations under the Purchase Agreement.

There can be no assurances that Key Brand will

satisfy any or all of these obligations.

Agreement in the Broadway Sale transaction may expose us to contingent liabilities.

Under the Purchase

Agreement in the Broadway Sale transaction, we have agreed to indemnify the purchaser, Key Brand for a breach or violation of any

representation, warranty or covenant made by us in the Purchase Agreement, for certain broker commissions due in connection with

the Broadway Sale, and for certain tax matters, subject to certain limitations.

Significant indemnification claims by Key Brand

could have a material adverse effect on our financial condition.

and the Purchase Agreement.

Key Brand’s

financial performance and condition will impact Key Brand’s ability to finance and grow its business, which would impact

its ability to satisfy its obligations under the Credit Agreement and the Purchase Agreement.

There can be no assurances that

Key Brand will satisfy any or all of these obligations.

We are unable

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transactions contemplated by the Purchase Agreement.

For as long as

we remain a public company, we will continue to incur the expenses of complying with public company reporting requirements.

no assurance that the fair value of the Warrant will ever be realized.

After estimating future

cash flows adjusted for risk factors, we determined that the fair value of the Warrant issued to us in connection with the Broadway

Sale was $700,000 as of December 31, 2012.

The Warrant will be marked to market each reporting period to reflect changes in fair

The valuation methodologies

used to determine fair value can be subject to significant subjectivity, and the fair value of the Warrant established pursuant

to such methodologies may never be realized.

See Note 7, “Fair

Value of Financial Instruments and Concentration of Credit Risk”

in the Notes to the Consolidated Financial Statements contained

in Part II, Item 8 of this Annual Report on Form 10-K for information on the methodologies used to determine fair value.

as we remain a public company, we will continue to incur the expenses of complying with public company reporting requirements.

Our reporting obligations

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The regulatory scope

of the Investment Company Act of 1940, as amended (the "Investment Company Act"), which was enacted principally for the

purpose of regulating vehicles for pooled investments in securities, extends generally to companies engaged primarily in the business

of investing, reinvesting, owning, holding or trading in securities.

The Investment Company Act may, however, also be deemed to

be applicable to a company that does not intend to be characterized as an investment company but that, nevertheless, engages in

activities that may be deemed to be within the definitional scope of certain provisions of the Investment Company Act.

that our anticipated principal activities following the Broadway Sale, which include operating the Ad Sales Division and the Intellectual

Properties Division, in which we now own 100%, will not subject us to regulation under the Investment Company Act.

Nevertheless,

there can be no assurance that we will not be deemed to be an investment company.

If we are deemed to be an investment company,

we may become subject to certain restrictions relating to our activities, including restrictions on the nature of our investments

and the issuance of securities.

In addition, the Investment Company Act imposes certain requirements on companies deemed to be

within its regulatory scope, including registration as an investment company, adoption of a specific form of corporate structure

and compliance with certain reporting, record keeping, voting, proxy, disclosure and other rules and regulations.

of the characterization of Hollywood Media as an investment company, our inability to satisfy such regulatory requirements, whether

on a timely basis or at all, would, under certain circumstances, have a material adverse effect on Hollywood Media.

Because our business

is smaller following the Broadway Sale, there is a possibility that our common stock may be delisted from the NASDAQ Global Market

if we fail to satisfy the continued listing standards of that market.

of the Investment Company Act of 1940, as amended (the "Investment Company Act"), which was enacted principally for

the purpose of regulating vehicles for pooled investments in securities, extends generally to companies engaged primarily in the

business of investing, reinvesting, owning, holding or trading in securities.

The Investment Company Act may, however, also be

deemed to be applicable to a company that does not intend to be characterized as an investment company but that, nevertheless,

engages in activities that may be deemed to be within the definitional scope of certain provisions of the Investment Company Act.

We believe that our anticipated principal activities following the Broadway Sale, which include operating the Intellectual Properties

Division, in which we now own 100%, will not subject us to regulation under the Investment Company Act.

Nevertheless, there can

be no assurance that we will not be deemed to be an investment company.

If we are deemed to be an investment company, we may become

subject to certain restrictions relating to our activities, including restrictions on the nature of our investments and the issuance

of securities.

In addition, the Investment Company Act imposes certain requirements on companies deemed to be within its regulatory

scope, including registration as an investment company, adoption of a specific form of corporate structure and compliance with

certain reporting, record keeping, voting, proxy, disclosure and other rules and regulations.

In the event of the characterization

of Hollywood Media as an investment company, our inability to satisfy such regulatory requirements, whether on a timely basis

or at all, would, under certain circumstances, have a material adverse effect on Hollywood Media.

business is smaller following the Broadway Sale, there is a possibility that our common stock may be delisted from the NASDAQ

Global Market if we fail to satisfy the continued listing standards of that market.

Our business is now

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In order to continue to be listed on the NASDAQ Global Market, we must meet the bid price and

total shareholders requirements as set forth in NASDAQ Listing Rule 5450(a) and at least one of the three standards in NASDAQ Listing

Rule 5450(b).

Pursuant to NASDAQ Listing Rule 5450(a), the bid price of our common stock cannot fall below $1.00 per share for

30 consecutive business days and we must have at least 400 total shareholders (including both holders of beneficial interest and

holders of record).

We believe that if we continue to qualify for listing on the NASDAQ Global Market, we will satisfy the Equity

Standard under NASDAQ Listing Rule 5450(b), which requires (i) stockholders’

equity of at least $10 million, (ii) at least

750,000 publicly held shares (total shares outstanding, less any shares held directly or indirectly by officers, directors or any

person who is the beneficial owner of more than 10% of the total shares outstanding of the company), (iii) market value of publicly

held shares of at least $5 million, and (iv) at least two registered and active market makers.

total shareholders requirements as set forth in NASDAQ Listing Rule 5450(a) and at least one of the three standards in NASDAQ

Listing Rule 5450(b).

Pursuant to NASDAQ Listing Rule 5450(a), the bid price of our common stock cannot fall below $1.00 per share

for 30 consecutive business days and we must have at least 400 total shareholders (including both holders of beneficial interest

and holders of record).

We believe that if we continue to qualify for listing on the NASDAQ Global Market, we will satisfy the

Equity Standard under NASDAQ Listing Rule 5450(b), which requires (i) stockholders’

equity of at least $10 million, (ii)

at least 750,000 publicly held shares (total shares outstanding, less any shares held directly or indirectly by officers, directors

or any person who is the beneficial owner of more than 10% of the total shares outstanding of the company), (iii) market value

of publicly held shares of at least $5 million, and (iv) at least two registered and active market makers.

If we are delisted

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may not be granted if we do not satisfy the applicable listing requirements for the NASDAQ Capital Market at the time of the application.

Even if we successfully transfer our common stock listing to the NASDAQ Capital Market, but are unable to satisfy the minimum bid

price requirement of $1.00 per share or any of the other continued listing standards of the NASDAQ Capital Market, our common stock

could be delisted from the NASDAQ Capital Market.

If our common stock were delisted from the NASDAQ Stock Market, we may apply

to transfer our common stock listing to the NYSE Amex (formerly the American Stock Exchange).

However, our application may not

be granted if we do not satisfy the applicable listing requirements for NYSE Amex at the time of the application.

If our common

stock were to be delisted from the NASDAQ Global Market and we could not satisfy the listing standards of the NASDAQ Capital Market

or the NYSE Amex, trading of our common stock most likely would be conducted in the over-the-counter market on an electronic bulletin

board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.

Such trading could reduce the market

liquidity of our common stock.

As a result, an investor would find it more difficult to dispose of, or obtain accurate quotations

for the price of, our common stock.

Even if we successfully transfer our common stock listing to the NASDAQ Capital Market, but are unable to satisfy the minimum

bid price requirement of $1.00 per share or any of the other continued listing standards of the NASDAQ Capital Market, our common

stock could be delisted from the NASDAQ Capital Market.

If our common stock were delisted from the NASDAQ Stock Market, we may

apply to transfer our common stock listing to the NYSE MKT.

However, our application may not be granted if we do not satisfy the

applicable listing requirements for NYSE MKT at the time of the application.

If our common stock were to be delisted from the

NASDAQ Global Market and we could not satisfy the listing standards of the NASDAQ Capital Market or the NYSE MKT, trading of our

common stock most likely would be conducted in the over-the-counter market on an electronic bulletin board established for unlisted

Such trading could reduce the market liquidity of our common stock.

As a result, an investor would find it more difficult

to dispose of, or obtain accurate quotations for the price of, our common stock.

If our common stock

is delisted from the NASDAQ Global Market and we could not satisfy the listing standards of the NASDAQ Capital Market or the NYSE

Amex and the trading price remains below $5.00 per share, trading in our common stock might also become subject to the requirements

of certain rules promulgated under the Exchange Act, which require additional disclosure by broker-dealers in connection with any

trade involving a stock defined as a “penny stock”

MKT and the trading price remains below $5.00 per share, trading in our common stock might also become subject to the requirements

of certain rules promulgated under the Exchange Act, which require additional disclosure by broker-dealers in connection with

any trade involving a stock defined as a “penny stock”

(generally, any equity security not listed on a national securities

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commissions on low-priced stocks

generally represent a higher percentage of the stock price than commissions on higher priced stocks, the current price of the common

stock can result in an individual shareholder paying transaction costs that represent a higher percentage of total share value

than would be the case if our share price were higher.

This factor may also limit the willingness of institutions to purchase our

common stock.

generally represent a higher percentage of the stock price than commissions on higher priced stocks, the current price of the

common stock can result in an individual shareholder paying transaction costs that represent a higher percentage of total share

value than would be the case if our share price were higher.

This factor may also limit the willingness of institutions to purchase

our common stock.

Finally, the additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers

from facilitating trades in our common stock, which could severely limit the market liquidity of the stock and the ability of investors

to trade our common stock.

from facilitating trades in our common stock, which could severely limit the market liquidity of the stock and the ability of

investors to trade our common stock.

no assurance that any disposition or other strategic transaction will occur or, if one is undertaken, of its potential terms or

From time to time we

explore potential transactions that may help us to realize the full value of our assets in the interest of our shareholders.

can be no assurance that any transaction will occur or, if one is undertaken, of its potential terms or timing.

“Management’s

Discussion and Analysis of Financial Condition and Results of Operation”

From time to time

we explore potential transactions that may help us to realize the full value of our assets in the interest of our shareholders.

There can be no assurance that any transaction will occur or, if one is undertaken, of its potential terms or timing.

See “Management’s

Discussion and Analysis of Financial Condition and Results of Operations”

We may not be

able to compete successfully in the book development business .

able to compete successfully in the e-books development business .

Numerous companies

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quality of relationships that we are able to develop with authors and celebrities.

There can be no assurance that our current or

future competitors will not be successful in developing relationships with authors and celebrities with whom we have previously

There can be no assurance that our current

or future competitors will not be successful in developing relationships with authors and celebrities with whom we have previously

had relationships.

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able to successfully protect our trademarks and proprietary rights.

own trademark registrations in the United States for many of the trademarks that we use and some of our trademarks are registered

in select foreign countries.

We have also filed trademark applications in select foreign countries for the mark HOLLYWOOD MEDIA

There can be no assurance that we will be able to secure adequate protection for these names or other trademarks

in the United States or in foreign countries.

Many countries have a “first-to-file”

trademark registration system;

and thus we may be prevented from registering our marks in certain countries if third parties have previously filed applications

to register or have registered the same or similar marks.

It is possible that our competitors or others will adopt product or service

names similar to ours, thereby impeding our ability to build brand identity and possibly leading to customer confusion.

Intellectual Properties

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in the United States on new publications of works for hire extend for a term of 95 years from the date of initial publication or

120 years from the year of creation, whichever expires first.

in the United States on new publications of works for hire extend for a term of 95 years from the date of initial publication

or 120 years from the year of creation, whichever expires first.

Trademark registration in the United States extends for a period

of ten years following the date of registration.

To maintain the registration, affidavits must be filed between the fifth and sixth

years following the registration date affirming that the trademark is still in use in commerce and providing evidence of such use.

The trademark registration must be renewed prior to the expiration of the ten-year period following the date of registration.

To maintain the registration, affidavits must be filed between the fifth and

sixth years following the registration date affirming that the trademark is still in use in commerce and providing evidence of

The trademark registration must be renewed prior to the expiration of the ten-year period following the

date of registration.

Failure to adequately

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operations is dependent in part on MovieTickets.com’s ability to enter into and maintain strategic relationships and agreements

with exhibitors, Tekno Books’

ability to develop and execute book projects with authors and Project Hollywood’s ability

to enter into and renew its contracts with film studios, production companies and media companies.

with exhibitors and Tekno Books’

ability to develop and execute book projects with authors.

There can be no assurance such

relationships with exhibitors, authors, studios and others will be developed and maintained or renewed and, if unable to do so,

our financial condition and results of operations could be adversely impacted.

Our operations

could be negatively impacted by systems interruptions.

relationships with exhibitors, authors and others will be developed and maintained or renewed and, if unable to do so, our financial

condition and results of operations could be adversely impacted.

operations could be negatively impacted by systems interruptions.

The hardware and software

used in the MovieTickets.com and Project Hollywood businesses could be damaged by fire, floods, hurricanes, earthquakes, power

loss, telecommunications failures, break-ins and similar events.

Our websites could also be affected by computer viruses, electronic

break-ins or other similar disruptive problems.

used in the MovieTickets.com business could be damaged by fire, floods, hurricanes, earthquakes, power loss, telecommunications

failures, break-ins and similar events.

Our websites could also be affected by computer viruses, electronic break-ins or other

What changed 10-K

Item 1A. Risk Factors