What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2013-05-14 compared with 2012-11-19 · 1028 added, 1396 removed, 845 unchanged (74% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CURRENT ASSETS:

2 unchanged sentences

Other receivables

Notes receivable, current

Related party receivable

Current portion of deferred compensation

Current assets of discontinued operations

Total current assets

2 unchanged sentences

INTANGIBLE ASSETS, net

NOTES RECEIVABLE, less current portion

DEFERRED COMPENSATION, less current portion

LONG TERM ASSETS OF DISCONTINUED OPERATIONS

LIABILITIES AND SHAREHOLDERS’

4 unchanged sentences

Current portion of capital lease obligations

Current liabilities of discontinued

Total current liabilities

3 unchanged sentences

DERIVATIVE LIABILITIES

LONG TERM LIABILITIES OF DISCONTINUED OPERATIONS

COMMITMENTS AND CONTINGENCIES

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCES

SHAREHOLDERS’

Preferred stock, $.01 par value, 1,000,000 shares

Preferred stock, $.01 par value, 1,000,000 shares authorized;

none outstanding

Common stock, $.01 par value, 100,000,000 shares authorized;

23,179,066 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively

22,651,766 and 23,162,466

shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively

Additional paid-in capital

12 unchanged sentences

OF OPERATIONS

Nine Months Ended September 30,

Three Months Ended September 30,

Three Months Ended March 31,

OPERATING COSTS AND EXPENSES

Editorial, production, development

and technology

Editorial, production, development and technology

Selling, general and administrative

4 unchanged sentences

(LOSSES) EARNINGS OF UNCONSOLIDATED INVESTEES

Equity in (losses) earnings of unconsolidated investees

Impairment loss

Total equity in losses of unconsolidated investees

OTHER INCOME (EXPENSE)

Interest, net

Accretion of discount, net of allowance for uncollectability

Total other income

Loss from continuing operations before income taxes

Income tax benefit

Income tax (expense)

Loss from continuing operations

Gain on sale of discontinued operations, net of income taxes

Income (loss) from discontinued operations

Loss from discontinued operations

Income from discontinued operations

NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST

Net loss attributable to

Hollywood Media Corp.

$ (1,425,101 )

$ (6,901,140 )

$ (5,419,024 )

Basic and diluted (loss) income per common share

Basic and diluted income (loss) per common share

Continuing operations

1 unchanged sentence

Total basic and diluted net loss per share

Weighted average common and common equivalent shares outstanding

Weighted average common and common equivalent shares outstanding - basic

The accompanying notes to condensed consolidated

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

$ (1,425,101 )

$ (6,871,113 )

Adjustments to reconcile net loss to net cash used in operating activities:

Income from discontinued operations

Income tax benefit

Depreciation and amortization

Amortization of deferred compensation costs –

Accretion of discount, net of allowance for uncollectability

Equity in losses of unconsolidated investees, net of distributions or dividends

Amortization of deferred compensation costs - officers

Loss on disposal of fixed assets

Gain on sale of business

Goodwill impairment

Change in fair value of derivative liabilities

Changes in assets and liabilities:

2 unchanged sentences

Related party receivable

Derivative liability

Accounts payable

4 unchanged sentences

Continuing operations

Net cash used in operating activities –

Net cash provided by operating activities –

Net cash used in operating activities

1 unchanged sentence

Capital expenditures

Acquisition of intangible assets

Net proceeds (expenditures) from sale of assets and

Net cash provided by (used in) investing activities –

continuing operations

Net cash provided by (used in) investing activities

discontinued operations

Net cash provided by (used in) investing activities

Net proceeds from sale of assets and businesses

Cash received on notes receivable

Net cash provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayments under capital lease obligations

Purchase of tendered common stock

(16,400,000 )

Net cash used in financing activities –

continuing operations

(16,453,005 )

Net cash used in financing activities –

Purchase of Company stock

Net cash used in financing activities

(16,455,367 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(23,867,114 )

NET DECREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, beginning of period

CASH AND CASH EQUIVALENTS, end of period

SUPPLEMENTAL SCHEDULE OF CASH RELATED ACTIVITIES:

SUPPLEMENTAL SCHEDULE OF CASH RELATED ACTIVITIES AND NON-CASH FINANCING

Interest paid

Income taxes paid

The accompanying notes to condensed consolidated financial statements

are an integral part of these condensed consolidated statements of cash flows.

Non-cash capital leases

The accompanying notes to condensed consolidated

financial statements

are an integral part of these condensed

consolidated statements of cash flows.

HOLLYWOOD MEDIA CORP.

17 unchanged sentences

condensed consolidated financial position, results of operations and cash flows.

The results of operations for the nine and three

months ended September 30, 2012 and the cash flows for the nine months ended September 30, 2012 are not necessarily indicative

of the results of operations or cash flows for the remainder of 2012.

The accompanying unaudited condensed consolidated financial

statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Hollywood

Media’s Annual Report on Form 10-K for the year ended December 31, 2011, as amended, as filed with the Securities and Exchange

The results of operations for the three months

ended March 31, 2013 and the cash flows for the three months ended March 31, 2013 are not necessarily indicative of the results

of operations or cash flows for the remainder of 2013.

The accompanying unaudited condensed consolidated financial statements

should be read in conjunction with the audited consolidated financial statements and notes thereto included in Hollywood Media’s

Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission.

OF SIGNIFICANT ACCOUNTING POLICIES:

4 unchanged sentences

balances and transactions have been eliminated in consolidation.

Hollywood Media’s 50%, 26.2% and 20.65% ownership interests

in NetCo Partners, MovieTickets.com and Project Hollywood LLC, respectively, are accounted for under the equity method of accounting.

On August 28, 2012 Hollywood Media assigned to Baseline Holdings all of Hollywood Media’s membership interest in Project

Hollywood in exchange for total consideration of $1,800,000.

See Note 9, “Related Party Transactions”

to these unaudited

Condensed Consolidated Financial Statements for more information on the assignment of the membership interest of Hollywood Media

in Project Hollywood, LLC.

Hollywood Media’s 50% and 26.2% ownership interests in

NetCo Partners and MovieTickets.com, respectively, are accounted for under the equity method of accounting.

Loss per Common Share

Financial Accounting

Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No.

260, “Earnings Per

(ASC 260), requires companies to present basic and diluted earnings per share (“EPS”).

Loss per common

share is computed by dividing net loss attributable to Hollywood Media Corp.

(the numerator) by the weighted average number of

common shares outstanding (the denominator) for the period presented.

Financial Accounting Standards Board Accounting

Standards Codification (“ASC”) Topic No.

260, “Earnings Per Share”

(ASC 260), requires companies

to present basic and diluted earnings per share (“EPS”).

Loss per common share is computed by dividing net loss attributable

to Hollywood Media Corp.

(the numerator) by the weighted average number of common shares outstanding (the denominator) for the

period presented.

The weighted average

number of common shares issuable upon conversion of convertible securities and upon exercise of outstanding options and warrants

totaled 75,000 shares for each of the nine and three months ended September 30, 2012 and such shares were excluded from the calculation

of basic and diluted loss per share for the nine and three months ended September 30, 2012, because their impact was anti-dilutive

to the loss per share from continuing operations.

Unvested shares are not included in the basic calculation until vesting occurs

and are not included in the diluted calculation because they are anti-dilutive.

There were no unvested shares as of September

30, 2012 and 2011, respectively.

For the Nine Months

totaled 75,000 shares for the three months ended March 31, 2013 and such shares were excluded from the calculation of basic and

diluted loss per share for the three months ended March 31, 2013 because their impact was anti-dilutive to the loss per share

from continuing operations.

Unvested shares are not included in the basic calculation until vesting occurs and are not included

in the diluted calculation because they are anti-dilutive.

There were no unvested shares as of March 31, 2013 and 2012, respectively.

For the Three Months

Ended September 30,

Ended March 31,

Basic weighted average shares outstanding

1 unchanged sentence

Dilutive weighted average shares outstanding

Options to purchase shares of Common Stock and

other stock-based awards outstanding which are not

included in the calculation of diluted income (loss)

per share because their impact is anti-dilutive

Options to purchase shares of Common Stock and other stock-based awards outstanding which

are not included in the calculation of diluted income (loss) per share because their impact is anti-dilutive

Segment Information

6 unchanged sentences

ASC Topic No.

280 has been applied to the information appearing in Note 6.

280 has been applied to the information appearing in Note 6, “Segment

Reporting.”

Derivative Instruments

The Company records

derivative instruments at fair value in our accompanying condensed consolidated balance sheets with changes in the fair values

derivative instruments at fair value in our accompanying condensed consolidated balance sheet with changes in the fair values

of those instruments reported in earnings in our condensed consolidated results of operations.

4 unchanged sentences

Pronouncements

In May 2011, the FASB

issued Accounting Standards Update (“ASU”) No.

2011-4, Fair Value Measurement (Topic 820):

Amendments to Achieve

Common Fair Value Measurement and Disclosure Requirements in U.S.

GAAP and IFRS .

This ASU represents the converged guidance

of the FASB and the IASB ("the Boards") on fair value measurement.

The collective efforts of the Boards and their staffs

have resulted in common requirements, including a consistent meaning of the term "fair value."

The Boards have concluded

the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial statements

prepared in accordance with U.S.

GAAP and IFRS.

The ASU is effective during interim and annual periods beginning after December

15, 2011 and its adoption did not have a material effect on the Company’s condensed consolidated financial statements.

In October 2012, the

Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2012-04, ''Technical Corrections

and Improvements"

in Accounting Standards Update No.

The amendments in this update cover a wide range of Topics

in the Accounting Standards Codification.

These amendments include technical corrections and improvements to the Accounting Standards

Codification and conforming amendments related to fair value measurements.

The amendments in this update will be effective for

fiscal periods beginning after December 15, 2012.

The adoption of ASU 2012-04 did not have a material impact on our financial

position or results of operations.

(3) DISCONTINUED

Sale of Broadway

Ticketing Division to Key Brand Entertainment, Inc.

Sale of Broadway Ticketing Division

to Key Brand Entertainment, Inc.

On December 15, 2010,

Hollywood Media completed the sale of its Broadway Ticketing Division (“the Broadway Sale”) through the sale of all

Hollywood Media completed the sale of its Broadway Ticketing Division (the "Broadway Sale”) through the sale of all

of the outstanding capital stock of Theatre Direct NY, Inc.

1 unchanged sentence

Brand”), as contemplated by the Stock Purchase Agreement, dated as of December 22, 2009, as amended, entered into between

Hollywood Media and Key Brand (“the Purchase Agreement”).

There are no material relationships among Hollywood Media

and Key Brand or any of their respective affiliates other than in respect of the Purchase Agreement and the related ancillary

Hollywood Media and Key Brand (as amended, the "Purchase Agreement”).

There are no material relationships among Hollywood

Media and Key Brand or any of their respective affiliates other than in respect of the Purchase Agreement and the related ancillary

Pursuant to the Purchase

Agreement, at the closing of the Broadway Sale, (a) Hollywood Media received (i) $20,530,102 in cash (including $530,102 pursuant

to the estimated working capital adjustment described in the Purchase Agreement), (ii) a $8,500,000 note (“the Loan”)

from Key Brand pursuant to a Second Lien, Security and Pledge Agreement, dated as of December 15, 2010 (the “Credit Agreement”),

pursuant to which Key Brand is obligated to pay Hollywood Media interest at a rate of 12% per annum, with the loan maturing on

December 15, 2015, which Loan is secured on a second lien basis by all stock and assets of Theatre Direct and its subsidiaries,

and (iii) a warrant to purchase 5% of the outstanding shares of common stock of Theatre Direct as of the closing date on a fully

diluted basis at an exercise price of $.01 per share (the “Warrant”), and (b) Key Brand assumed $1,600,000 of liabilities

associated with employment agreements with certain employees of Theatre Direct.

In addition, Hollywood Media was entitled to receive

earnout payments (“the Earnout”) of up to $14,000,000, in two $7,000,000 tranches, contingent upon Theatre Direct

and its subsidiaries achieving certain revenue targets during the period from the closing date through the end of the 10 th

full fiscal year following the closing date as set forth in the Purchase Agreement.

to the estimated working capital adjustment described in the Purchase Agreement), (ii) an $8,500,000 note (the "Loan”)

from Key Brand pursuant to a Second Lien Credit, Security and Pledge Agreement, dated as of December 15, 2010 (as amended, the

“Credit Agreement”), pursuant to which Key Brand is obligated to pay Hollywood Media interest at a rate of 12% per

annum, with the Loan maturing on December 15, 2015, which Loan is secured on a second lien basis by all stock and assets of Theatre

Direct and its subsidiaries, and (iii) a warrant to purchase 5% of the outstanding shares of common stock of Theatre Direct as

of the closing date on a fully diluted basis at an exercise price of $.01 per share (as amended, the “Warrant”), and

(b) Key Brand assumed $1,600,000 of liabilities associated with employment agreements with certain employees of Theatre Direct.

In addition, Hollywood Media was entitled to receive earnout payments (the "Earnout”) of up to $14,000,000, in two

$7,000,000 tranches, contingent upon Theatre Direct and its subsidiaries achieving certain revenue targets during the period from

the closing date through the end of the 10 th full fiscal year following the closing date as set forth in the Purchase

In connection with

the Credit Agreement, Hollywood Media, Key Brand and JPMorgan Chase Bank, N.A., as administrative agent for the senior secured

lenders of Key Brand, entered into a Subordination and Intercreditor Agreement, dated December 15, 2010 (the “Intercreditor

Agreement”) which defines the rights and obligations of the senior secured lenders and Hollywood Media as subordinated lender,

lenders of Key Brand, entered into a Subordination and Intercreditor Agreement, dated December 15, 2010 (the “JPM Intercreditor

Agreement”) which defined the rights and obligations of the senior secured lenders and Hollywood Media as subordinated lender,

including, without limitation, the rights of payment and the subordination of the security interests of Hollywood Media.

Amendment to the Broadway Sale Purchase

On March 14, 2011,

Hollywood Media delivered to Key Brand a closing statement setting forth Hollywood Media’s calculation of Theatre Direct’s

working capital as of the closing date of the Broadway Sale determined in the manner described in the Purchase Agreement.

to such closing statement, Hollywood Media accrued $3,702,620 as a working capital adjustment as of December 31, 2010 under the

Purchase Agreement which included $530,102 related to the estimated working capital delivered at closing by Key Brand.

capital adjustment of $3,734,106 was paid on March 22, 2011.

April 2012 Amendments

to the Broadway Sale Purchase Agreement, the Credit Agreement and the JPM Intercreditor Agreement

On April 22, 2012,

the Company entered into Amendment No.

4 (the “Amendment”) to the Purchase Agreement.

Pursuant to the Amendment, the

Company consented to the contribution of the “group sales”

business (but not the Broadway.com consumer ticketing business)

owned by Key Brand to a newly formed joint venture (the “Group Sales JV”;

such contribution, the “Group Sales

Contribution”).

The balance of the business sold to Key Brand under the terms of the Purchase Agreement, which included

Broadway.com, remained at Key Brand and Theatre Direct.

As part of the Amendment, Key Brand agreed to pay the first $7 million

earnout amount (the “First $7 Million Earnout”) to the Company on or before October 1, 2012 regardless of the actual

revenues of Theatre Direct and its subsidiaries for the fiscal year of Key Brand ending June 30, 2012.

The First $7 Million Earnout

amount was paid by Key Brand to the Company on October 1, 2012 and was recorded upon collection of the $7 million received on

October 1, 2012.

In addition, the revenue calculation for the second $7 million earnout amount (the “Second $7 Million Earnout”)

was modified to exclude “group sales”

(and the revenues of the new joint venture conducting such business) and the

target for the Second $7 Million Earnout was reduced from $150 million to $123 million accordingly.

On October 5, 2012, Hollywood

Media received written notice from Key Brand that Theatre Direct achieved the revenue target for the Second $7 Million Earnout

in Key Brand’s fiscal year ended June 30, 2012.

Accordingly, pursuant to the Amendment, the Second $7 Million Earnout was

added as of October 1, 2012 to the principal amount of the Loan under the Credit Agreement.

Pursuant to the Credit Agreement,

interest at a rate of 12% per annum and principal on such Second $7 Million Earnout amount will be amortized over the term of

the Credit Agreement in equal quarterly installments.

As a result of the Second $7 Million Earnout being added to the $8.5 million

principal amount of the Loan, the principal amount of the Loan due Hollywood Media by Key Brand was $15.5 million as of October 1, 2012.

The Company also consented

to certain amendments to the Credit Agreement, including consent to the Group Sales Contribution and to provide for additional

reporting requirements.

The Company also agreed to amend the Intercreditor Agreement to provide that, subject to Key Brand’s

compliance with the terms and conditions of its senior secured credit agreement, Key Brand would be permitted to make scheduled

quarterly installment payments of the Second Earnout amounts prior to the maturity of the Credit Agreement, notwithstanding that

the obligations under the Credit Agreement are subordinated to $15 million of Key Brand’s obligations under the senior secured

credit agreement.

Hollywood Media will

record a gain on the earnout upon collection of consideration.

The Warrant will be marked to market each reporting period to reflect

Hollywood Media entered into Amendment No.

4 to the Purchase Agreement (the “Fourth Purchase Agreement Amendment”).

Pursuant to the Fourth Purchase Agreement Amendment, Hollywood Media consented to the contribution of the “group sales”

business (but not the Broadway.com consumer ticketing business) owned by Key Brand to a newly formed joint venture (the “Group

Sales JV”;

such contribution, the “Group Sales Contribution”).

The balance of the business sold to Key Brand

under the terms of the Purchase Agreement, which included Broadway.com, remained at Key Brand and Theatre Direct.

As part of the

Fourth Purchase Agreement Amendment, Key Brand agreed to pay the first $7,000,000 earnout amount (the “First $7 Million

Earnout”) to Hollywood Media on or before October 1, 2012 regardless of the actual revenues of Theatre Direct and its subsidiaries

for the fiscal year of Key Brand ending June 30, 2012.

The First $7 Million Earnout amount was paid by Key Brand to Hollywood

Media on October 1, 2012 and was recorded upon collection of the $7,000,000 received on October 1, 2012.

In addition, the revenue

calculation for the second $7,000,000 earnout amount (the “Second $7 Million Earnout”) was modified to exclude “group

(and the revenues of the new joint venture conducting such business) and the revenue target for the Second $7 Million

Earnout was reduced from $150 million to $123 million accordingly.

On October 5, 2012, Hollywood Media received written notice

from Key Brand that Theatre Direct achieved the revenue target for the Second $7 Million Earnout in Key Brand’s fiscal year

ended June 30, 2012.

Accordingly, pursuant to the Fourth Purchase Agreement Amendment, the Second $7 Million Earnout was added

as of October 5, 2012 to the principal amount of the Loan under the Credit Agreement.

As of October 5, 2012, pursuant to the Credit

Agreement, interest at a rate of 12% per annum and principal on the $7,000,000 portion of the Loan will be amortized over the

term of the Credit Agreement in equal quarterly installments.

As a result of the Second $7 Million Earnout being added to the

$8,500,000 principal amount of the Loan, the principal amount of the Loan due Hollywood Media by Key Brand was $15,500,000 as

of October 5, 2012.

Hollywood Media initially

recorded the Second $7 Million Earnout at a fair value of $4,500,000, which reflects a $2,500,000 discount.

Hollywood Media

will amortize the $2,500,000 discount under the effective interest method.

Amortization under the effective interest method

is included in "Accretion of discount, net of allowance for uncollectability"

in the accompanying unaudited condensed

consolidated statements of operations.

On December 31, 2012, Hollywood Media received a scheduled payment under the Loan

in the amount of $1,002,128, which included a principal payment of $538,462, an interest payment of $203,000 on the $7,000,000

portion of the Loan and $260,666 of interest on the $8,500,000 portion of the Loan.

The principal payment of $538,462, combined

with accretion of discount of $288,585, reduced the value of the $7,000,000 portion of the Loan from $4,500,000 to $4,250,123.

Accretion of discount, net of the reversal of previously recorded allowance for bad debt, was $1,429,315 on the $8,500,000 portion

of the Loan during the three months ended December 31, 2012.

On March 29, 2013, Hollywood Media received a scheduled payment under

the Loan in the amount of $1,132,404, which included a principal payment of $646,154, an interest payment of $210,000 on the $7,000,000

portion of the Loan and $276,250 of interest on the $8,500,000 portion of the Loan.

The principal payment of $646,154, combined

with accretion of discount of $343,326, reduced the value of the $7,000,000 portion of the Loan from $4,250,123 at December 31,

2012 to $3,947,295 at March 31, 2013.

Accretion of discount was $267,159 on the $8,500,000 portion of the Loan during the three

months ended March 31, 2013.

On April 22, 2012,

Hollywood Media also consented to certain amendments to the Credit Agreement, including consent to the Group Sales Contribution

and to provide for additional reporting requirements.

Hollywood Media also agreed to amend the JPM Intercreditor Agreement to

provide that, subject to Key Brand’s compliance with the terms and conditions of Key Brand’s senior secured credit

agreement, Key Brand would be permitted to make scheduled quarterly installment payments of the Second $7 Million Earnout prior

to the maturity of the Credit Agreement, notwithstanding that the obligations under the Credit Agreement were subordinated to

$15 million of Key Brand’s obligations under Key Brand’s senior secured credit agreement.

December 2012 Amendments

to the Credit Agreement and the Warrant and New Intercreditor Agreement

On December 31, 2012,

Hollywood Media entered into Amendment No.

2 to the Credit Agreement (the “Second Credit Agreement Amendment”).

to the Second Credit Agreement Amendment, (i) effective as of December 31, 2012, the interest rate on the Loan was increased from

12% per annum to 13% per annum, (ii) the maturity date of the Loan was shortened from December 15, 2015 to June 30, 2015, (iii)

Hollywood Media consented to Key Brand amending and restating Key Brand’s senior secured credit agreement to replace Key

Brand’s prior senior lender, JPMorgan Chase Bank, N.A., with Key Brand’s new senior lender, Terido LLP (with the terms

and conditions of such senior secured credit agreement remaining substantially the same), (iv) subject to the terms and conditions

of the Terido Intercreditor Agreement described below, the net proceeds from any indebtedness incurred by Key Brand that is not

otherwise permitted under Key Brand’s amended and restated senior secured credit agreement (other than from the proceeds

of a refinancing of such amended and restated senior secured credit agreement) will be used to prepay the Loan, (v) the prior

consent of Hollywood Media is required for any amendment to Key Brand’s amended and restated senior secured credit agreement

that would be adverse to Hollywood Media in any material respect, and (vi) Key Brand will provide Hollywood Media with additional

and more frequent financial reporting.

Except as described in this paragraph, the terms and conditions of the Credit Agreement

and the Loan remain substantially the same.

In connection with

the Second Credit Agreement Amendment and Key Brand’s amended and restated senior secured credit agreement, Hollywood Media

and Key Brand entered into that certain Subordination and Intercreditor Agreement, dated December 31, 2012 (the “Terido

Intercreditor Agreement”), with Terido LLP, as administrative agent for the senior secured lenders of Key Brand, which defines

the rights and obligations of the senior secured lenders and Hollywood Media as subordinated lender, including, without limitation,

the rights of payment and the subordination of the security interests of Hollywood Media.

The terms and conditions of the Terido

Intercreditor Agreement are substantially similar to the terms and conditions of the prior JPM Intercreditor Agreement.

On December 31, 2012,

in connection with the Second Credit Agreement Amendment, the Warrant was amended to (i) shorten the earliest date that Hollywood

Media can put the Warrant to Theatre Direct from December 16, 2017 to June 30, 2015, (ii) increase the minimum price that Hollywood

Media can put the Warrant to Theatre Direct from $1,000,000 to $3,000,000, and (iii) increase the minimum price that Theatre Direct

can redeem the Warrant from Hollywood Media from $1,000,000 to $3,000,000.

Except as described in the preceding sentence, the

terms and conditions of the Warrant remain substantially the same.

The Warrant is marked to market each reporting period to reflect

changes in fair value.

Hollywood Media received payments of $776,333 and $260,667 of interest from Key Brand during the nine and

three months ended September 30, 2012, respectively, and $773,500 and $260,667 in payments of interest from Key Brand during the

nine and three months ended September 30, 2011, respectively, in accordance with the terms of the Loan which was included in “Interest,

in the accompanying condensed consolidated statements of operations for the nine and three months ended September 30,

2012 and 2011, respectively.

After the closing

date of the sale of Theatre Direct pursuant to the Purchase Agreement, Hollywood Media delivered on March 14, 2011 to Key Brand

a closing statement setting forth Hollywood Media’s calculation of Theatre Direct’s working capital as of the closing

date determined in the manner described in the Purchase Agreement.

Pursuant to the closing statement, Hollywood Media accrued

$3,702,620 as a working capital adjustment as of December 31, 2010 under the agreement which included $530,102 related to the

estimated working capital delivered at closing by Key Brand.

The working capital adjustment of $3,734,106 was paid on March 22,

2011 and included $31,486 of interest which is included in “Gain (loss) on sale of discontinued operations, net of income

in the accompanying condensed consolidated statements of operations for the nine and three months ending September

The fair value of the Warrant was $700,000 on March 31, 2013 and December 31, 2012, respectively.

In connection with

the Second Credit Agreement Amendment, Terido Intercreditor Agreement and the amendment to the Warrant described above, on December

31, 2012, Key Brand paid Hollywood Media an amendment fee of $50,000 and reimbursed Hollywood Media for all out-of-pocket costs

and expenses incurred in documenting such agreements.

Hollywood.com Business

10 unchanged sentences

Business to R&S Investments for a potential purchase price of $10,000,000 cash, which included $1,000,000 that was paid to

Hollywood Media at closing and potential earnout payments totaling $9,000,000, of which $1,892,692 had been paid as of September

Hollywood Media recognized $412,684 and $85,926 in earnout gain during the nine and three months ended September 30,

2012, respectively, and $460,037 and $155,538 in earnout gain during the nine and three months ended September 30, 2011, respectively,

which is included in “Income from discontinued operations”

in our accompanying condensed consolidated statements of

Hollywood Media at closing and potential earnout payments totaling $9,000,000, of which $1,892,692 had been paid as of August

Hollywood Media recognized $197,517 in earnout gain during the three months ended March 31, 2012, which is included in “Gain

on sale of discontinued operations, net of income taxes”

in our accompanying unaudited condensed consolidated statements

of operations.

Hollywood Media does not have a significant continuing involvement in the Hollywood.com Business operations.

Buyout of Obligation of R&S Investments,

LLC to Pay Hollywood.com Earnout

On August 28,

(1) Hollywood Media and R&S Investments entered into an Agreement (the “R&S Agreement”) regarding the

R&S Purchase Agreement, (2) Hollywood Media, Mr.

2012, (1) Hollywood Media and R&S Investments entered into an Agreement (the “R&S Agreement”) regarding

the R&S Purchase Agreement, (2) Hollywood Media, Mr.

Rubenstein and Ms.

Silvers entered into a letter agreement regarding the

R&S Agreement (the “Rubenstein Silvers Letter Agreement”), and (3) R&S Investments provided Hollywood Media

with a letter regarding a contingent additional payment (the “R&S Letter”).

As described below, the R&S

Agreement and the Rubenstein Silvers Letter Agreement and the transactions contemplated by the R&S Agreement and the Rubenstein

Silvers Letter Agreement were approved by a Special Committee of Hollywood Media’s Board of Directors comprised solely of

independent directors (the “Special Committee”).

Silvers entered into a letter agreement regarding

the R&S Agreement (the “Rubenstein Silvers Letter Agreement”), and (3) R&S Investments provided Hollywood

Media with a letter regarding a contingent additional payment (the “R&S Letter”).

As described below, the

R&S Agreement and the Rubenstein Silvers Letter Agreement and the transactions contemplated by the R&S Agreement and the

Rubenstein Silvers Letter Agreement were approved by a Special Committee of Hollywood Media’s Board of Directors comprised

solely of independent directors (the “Special Committee”).

Pursuant to the R&S

14 unchanged sentences

Rubenstein) and is a reduction to “Derivative Liabilities”

in the accompanying condensed consolidated balance sheets.

in the accompanying unaudited condensed consolidated balance sheets.

In addition, pursuant

9 unchanged sentences

Liabilities”

in the accompanying condensed consolidated balance sheets.

in the accompanying unaudited condensed consolidated balance sheets.

Pursuant to the R&S

21 unchanged sentences

UK Theatres Online Limited, Spring Leisure Limited, Cinemasonline Limited and WWW.CO.UK Limited.

Jeffrey Spector, a

director of Buyer, is also (i) a director of all four subsidiaries of Cinemasource UK Limited (UK Theatres Online Limited, Spring

Leisure Limited, Cinemasonline Limited and WWW.CO.UK Limited) and (ii) an employee of one of the subsidiaries of Cinemasource

UK Limited (UK Theatres Online).

Janette Erskine, a director of Buyer, is also (i) a director of three subsidiaries of Cinemasource

UK Limited (UK Theatres Online Limited, Spring Leisure Limited and Cinemasonline Limited) and (ii) an employee of one of the subsidiaries

of Cinemasource UK Limited (UK Theatres Online).

As of the closing

of the transactions contemplated by the Share Purchase Agreement, (1) Jeffrey Spector, a director of Buyer, was also (i) a director

of all four subsidiaries of Cinemasource UK Limited (UK Theatres Online Limited, Spring Leisure Limited, Cinemasonline Limited

and WWW.CO.UK Limited) and (ii) an employee of one of the subsidiaries of Cinemasource UK Limited (UK Theatres Online) and (2)

Janette Erskine, a director of Buyer, was also (i) a director of three subsidiaries of Cinemasource UK Limited (UK Theatres Online

Limited, Spring Leisure Limited and Cinemasonline Limited) and (ii) an employee of one of the subsidiaries of Cinemasource UK

Limited (UK Theatres Online).

Pursuant to the Share

8 unchanged sentences

gain on sale attributable to the sale of Cinemasource UK Limited of $649,215.

This gain on sale is included in “Income (loss)

from discontinued operations”

in our accompanying Condensed Consolidated Statements of Operations.

portion of the discounted amount of the non-interest bearing loan is included in “Other receivables”

and the long-term

portion of the non-interest bearing loan is included in “Other assets”

in our accompanying condensed consolidated

The current portion of the discounted amount of

the non-interest bearing loan is included in “Notes receivable, current”

and the long-term portion of the non-interest

bearing loan is included in “Notes receivable, less current portion”

in our accompanying unaudited condensed consolidated

balance sheets.

7 unchanged sentences

certain dividends, payments or other derivative assets received in respect of the Purchased Shares), and (iii) disposing of the

equity or redemption in respect of the Purchased Shares (and certain dividends, payments or other derivative assets received in

equity of redemption in respect of the Purchased Shares (and certain dividends, payments or other derivative assets received in

respect of the Purchased Shares).

13 unchanged sentences

the Purchased Shares back to the Company) in satisfaction of the Balance.

Pursuant to ASC Topic

360, “Accounting for the Impairment or Disposal of Long-Lived Assets”

ASC 360, the Company’s condensed

consolidated financial statements have been reclassified for all periods presented to reflect the operations, assets and liabilities

of Cinemasource UK Limited as discontinued operations.

The sale of Cinemasource UK Limited qualifies for discontinued operations

treatment under ASC 360.

The assets and liabilities of such operations have been reclassified as current or long term “Assets

of discontinued operations”

and current and long term “Liabilities of discontinued operations”

in the accompanying

December 31, 2011 consolidated balance sheet, and consist of the following:

December 31, 2011

Current assets

Property and equipment, net

Total assets of discontinued operations

Current liabilities

Long-term liabilities

Total liabilities of discontinued operations

Results from Discontinued Operations

The net income from

discontinued operations has been classified in the accompanying condensed consolidated statements of operations as “Income

(loss) from discontinued operations”

and includes the gain on sale of the Hollywood.com Business and the gain on sale of

Cinemasource UK Limited Business.

Summarized results of discontinued operations include the operating gain from the Hollywood.com

Business and the operating gain from the Cinemasource UK Limited Business and through their respective dates of disposition, for

the nine and three months ended September 30, 2012 and 2011.

Nine Months Ended September 30,

Three Months Ended September 30,

discontinued operations has been classified in the accompanying unaudited condensed consolidated statements of operations as “Income

from discontinued operations”

and includes the gain on sale of the Hollywood.com Business.

Summarized results of discontinued

operations include the operating loss from the Cinemasource UK Limited Business and through their respective dates of disposition,

for the three months ended March 31, 2013 and 2012.

Three Months Ended March 31,

Net Revenues:

Gain on sale of discontinued operations

Income tax expense

Gain on sale of discontinued operations, net of income

Income (loss) from discontinued

Gain on sale of discontinued operations, net of

Loss from discontinued operations

Income from discontinued operations

OF COMMON STOCK TENDERED:

On February 25, 2011,

Hollywood Media announced the final results of a tender offer to purchase up to 8,000,000 shares of its common stock at a price

of $2.05 per share (less any applicable withholding taxes and without interest) which tender offer expired on February 18, 2011.

Hollywood Media accepted 8,000,000 shares for purchase for a total cost of approximately $16,400,000.

The number of shares properly

tendered was 24,157,429.

Accordingly, payment was made for approximately 33% of the tendered shares, and the rest of the tendered

shares were withdrawn from the tender offer.

Immediately following the purchase of the tendered shares, Hollywood Media had 23,179,066

shares of common stock outstanding.

During the nine and three months ended September 30, 2012, respectively, Hollywood Media did

not repurchase shares of its common stock.

REPURCHASE PROGRAM:

During the first quarter

of 2013, 510,700 shares of Hollywood Media’s common stock were purchased under the repurchase program for $749,966.

No shares were repurchased during the three months ended March 31, 2012.

For additional information relating to the stock repurchase

program, see Part II, Item 2 of this Quarterly Report on Form 10-Q and “Liquidity and Capital Resources”

Item 2 of this Quarterly Report on Form 10-Q.

As of March 31, 2013, the maximum approximate dollar value of shares that may have

been purchased under the Repurchase Program was $1,923,295 (calculated by subtracting (i) the total paid for all shares purchased

under the Repurchase Program from inception through March 31, 2013 or $8,076,705 from (ii) the $10,000,000 potential maximum dollar

value of repurchases approved under the life of the Repurchase Program).

VALUE MEASUREMENTS:

The carrying amounts

of cash and cash equivalents, receivables and accounts payable, approximate their fair values due to the short-term maturities

of these instruments.

The carrying value of notes payable and the non-interest bearing loan receivable with imputed interest at

16.5%, per annum, approximate fair value because the interest rates approximate the market rates.

The carrying amounts of cash and

cash equivalents, receivables and accounts payable, approximate their fair values due to the short-term maturities of these instruments.

The carrying value of notes payable and the non-interest bearing loan receivable with imputed interest at 16.5%, per annum, approximate

fair value because the interest rates approximate the market rates.

Financial instruments

that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents

The Company’s cash management and investment policies restrict investments to low risk, highly-liquid securities, and the

Company performs periodic evaluations of the credit standing of the financial institutions with which it deals.

The Company generally

does not require collateral when granting credit.

and accounts receivable.

The Company’s cash management and investment policies restrict investments to low risk, highly-liquid

securities, and the Company performs periodic evaluations of the credit standing of the financial institutions with which it deals.

The Company generally does not require collateral when granting credit.

Fair value is the

31 unchanged sentences

Rubenstein and Ms.

See Note 3, “Discontinued

Operations”

to these unaudited Condensed Consolidated Financial Statements for more information regarding these transactions.

The fair value of this liability, which was initially measured on March 15, 2011, the date that the compensation arrangement was

effective, is recorded in “Derivative Liabilities”, with any changes in the fair value recorded in “Other, net”

in the accompanying condensed consolidated statements of operations.

The fair value of this

liability, which was initially measured on March 15, 2011, the date that the compensation arrangement was effective, is recorded

in “Derivative Liabilities”, with any changes in the fair value recorded in “Other, net”

in the accompanying

unaudited condensed consolidated statements of operations.

See Note 3, “Discontinued Operations”

1 unchanged sentence

on the Buyout Amount and its reduction of the derivative liability.

At September 30, 2012, the fair value of the derivative liability

At March 31, 2013 and December 31, 2012, the fair value of

the derivative liability was $60,000.

Warrant Held by

Hollywood Media in Theatre Direct

In conjunction with

1 unchanged sentence

which can only be exercised upon a Conversion Event, as defined, and which also contains a put option that allows the Company,

after the seventh anniversary of the issue date, to put the warrant to Key Brand for the greater of (i) fair market value of the

shares and (ii) $1.0 million.

after the seventh anniversary of the issue date (which was later shortened to June 30, 2015 as referenced below), to put the warrant

to Key Brand for the greater of (i) fair market value of the shares and (ii) $1.0 million (which was later increased to $3.0 million

as referenced below).

The Warrant is revalued on a recurring basis.

After estimating future cash flows adjusted

for risk factors it was determined that the fair value was not material at September 30, 2012.

On December 31, 2012,

in connection with the Second Credit Agreement Amendment, the Warrant was amended to (i) shorten the earliest date that Hollywood

Media can put the Warrant to Theatre Direct from December 16, 2017 to June 30, 2015, (ii) increase the minimum

price that Hollywood Media can put the Warrant to Theatre Direct from $1,000,000 to $3,000,000, and (iii) increase the minimum

price that Theatre Direct can redeem the Warrant from Hollywood Media from $1,000,000 to $3,000,000.

After estimating future

cash flows adjusted for risk factors it was determined that the fair value of the Warrant was $700,000 at March 31, 2013 and December

The estimate of fair

value of the Warrant employed using a multiples approach and discounted cash flow analysis and assumed the Warrant was to be monetized

as of the valuation date.

The Warrant's values were then adjusted to reflect a range of outcomes and assigned probability

weights, and the Warrant's put and call rights of Hollywood Media and Key Brand.

The key assumptions used to determine the

fair value of the Warrant during fiscal 2012 were:

implied multiples used in the business enterprise value income and market approaches

ranging from 3.25 to 4.0 for fiscal 2012;

and a discount rate of 25%, based on the Company’s best estimate of the weighted-average

cost of capital adjusted for risks associated with the Warrant for fiscal 2012.

Certain assets such

6 unchanged sentences

presents the Company’s derivative liabilities and warrant on a recurring basis and the Company’s goodwill on a non-recurring

basis within the fair value hierarchy utilized to measure fair value as of September 30, 2012:

Derivative liabilities –

September 30, 2012

Warrant –

September 30, 2012

Goodwill –

September 30, 2012

basis within the fair value hierarchy utilized to measure fair value as of March 31, 2013:

Derivative liabilities

There were no transfers between the levels

of the fair value hierarchy during the quarter ended September 30, 2012.

of the fair value hierarchy during the quarter ended March 31, 2013.

The following table presents a reconciliation

of the compensation derivative liabilities measured at fair value on a recurring basis using significant unobservable input (Level

3) from December 31, 2011 to September 30, 2012:

3) from December 31, 2012 to March 31, 2013:

Balance at December 31, 2012

Change in fair value included in earnings

Change in Fair Value Resulting from R&S

Agreement Waivers included in Income from

Discontinued Operations

Balance at September 30, 2012

Balance at March 31, 2013

The following table presents a reconciliation of the Warrant

measured at fair value on a recurring basis using significant unobservable input (Level 3) from December 31, 2012 to March 31,

Balance at December 31, 2012

Change in fair value included in "Other, net"

Balance at March 31, 2013

Hollywood Media’s

19 unchanged sentences

an assessment of and report on internal control over financial reporting.

This segment also includes Hollywood Media’s investment

in Project Hollywood.

On August 28, 2012 Hollywood Media assigned to Baseline Holdings all of Hollywood Media’s membership

interest in Project Hollywood in exchange for total consideration of $1,800,000.

See Note 9, “Related Party Transactions”

to these unaudited Condensed Consolidated Financial Statements for more information on the assignment of Hollywood Media’s

membership interest in Project Hollywood, LLC.

This segment also included Hollywood Media’s investment

in Project Hollywood, LLC ("Project Hollywood").

On August 28, 2012 Hollywood Media assigned to Baseline Holdings LLC

all of Hollywood Media’s membership interest in Project Hollywood in exchange for total consideration of $1,800,000.

Note 9, “Related Party Transactions”

to these unaudited condensed consolidated financial statements for more information

on the assignment of Hollywood Media’s membership interest in Project Hollywood.

There are no intersegment

sales or transfers.

As of September 30,

As of March 31,

2013, the Ad Sales segment consists of the Company’s investment in MovieTickets.com.

4 unchanged sentences

regarding Hollywood Media’s reportable segments.

Nine Months Ended September 30,

Three Months Ended September 30,

Three months ended March 31,

Net Revenues:

3 unchanged sentences

$ (1,369,863 )

$ (4,997,504 )

$ (1,058,476 )

$ (1,778,845 )

Capital Expenditures:

Intellectual Properties

Depreciation and Amortization Expense:

Depreciation and

Amortization Expense:

Intellectual Properties

September 30,

Segment Assets:

Intellectual Properties

(1) December 31, 2011 segment

assets have been adjusted for the reclassification of assets

related to Cinemasource UK Limited of $590,507 from the

Ad Sales segment to the Other segment.

During the three months

ended September 30, 2012, due to a deterioration in the Ad Sales Division and its prospects over the next twelve months, we performed

an interim impairment test of goodwill in connection with the preparation of our financial statements for the three months ended

September 30, 2012.

For purposes of testing

goodwill for potential impairment, we estimated the fair value of the applicable reporting unit to which all goodwill is allocated

using generally accepted valuation methodologies, including market and income based approaches, and relevant data available through

and as of November 14, 2012.

The market approach is a valuation method in which fair value is estimated based on observed market

prices of publicly traded guideline companies.

Under the market approach, the valuation process is essentially that

of comparison and correlation between the subject company and other similar companies.

The income approach is a method in which

fair value is estimated based on the cash flows that an asset could be expected to generate over its useful life, including residual

value cash flows.

These cash flows are then discounted to their present value equivalents using a rate of return that accounts

for the relative risk of not realizing the estimated annual cash flows and for the time value of money.

The key inputs

to the discounted cash flow model were our historical and estimated future revenues and the discount rate, among others.

During the three months

ended September 30, 2012, as a result of this testing, it was determined that the future cash flow of this (or assets comprised

by this) business unit is likely impaired, and the risk associated with previously expected cash flows has increased.

we concluded that goodwill was impaired and we recorded a non-cash goodwill impairment charge of $3,600,000 in the third quarter

This charge, representing approximately 58% of the previous carrying value is included in the impairment loss

line item in “Earnings (Losses) of Unconsolidated Investees”

in our condensed consolidated statement of operations

for the three and nine months ended September 30, 2012.

The perceived increased uncertainty and risk associated with expected

cash flows are based in part upon the dispute discussed at Note 7, “Certain Commitments and Contingencies”

unaudited Condensed Consolidated Financial Statements.

COMMITMENTS AND CONTINGENCIES:

On October 27, 2011,

the Company, together with National Amusements Inc., filed a lawsuit against AMC Entertainment Inc.

(“AMC”) (Case

50 2011 CA 016684) in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida relating to MovieTickets.com.

On February 8, 2012, MovieTickets.com, Inc.

the Company, together with National Amusements Inc.

and the MovieTickets.com Joint Venture, filed a lawsuit against AMC Entertainment

(“AMC”) and MovieTickets.com Inc.

(as nominal defendant) (Case No.

50 2011 CA 016684) in the Circuit Court of

the 15 th Judicial Circuit in and for Palm Beach County, Florida relating to MovieTickets.com.

On February 8,

2012, MovieTickets.com, Inc.

joined the lawsuit against AMC and an amended complaint was filed.

MovieTickets.com

is an online movie ticketing service in which Hollywood Media, National Amusements, Inc.

MovieTickets.com is an online

movie ticketing service in which Hollywood Media, National Amusements, Inc.

and AMC each own a 26.2% equity interest.

2 unchanged sentences

provide its ticket inventory to MovieTickets.com, and has breached its contractual and common law duties of good faith, fair dealing,

and loyalty with respect to MovieTickets.com and its joint venturers, Hollywood Media and National Amusements, Inc., as a result

of various actions by AMC.

The amended complaint contends that when AMC’s demands for greater control and a larger share

of MovieTickets.com were not met, AMC breached and continues to breach the MovieTickets.com Joint Venture Agreement, which obligates

AMC to exclusively provide its ticket inventory to MovieTickets.com.

The amended complaint further specifies breaches by AMC of

its contractual and common law duties of good faith, fair dealing, and loyalty and violations of Florida’s Deceptive and

Unfair Trade Practices Act.

Among other things, the plaintiffs allege in the amended complaint that AMC used its inside position

with MovieTickets.com and access to MovieTickets.com’s proprietary information in order to advance AMC’s own goals

in contravention of its duty of loyalty to the joint venture and to the detriment of MovieTickets.com.

and loyalty with respect to the MovieTickets.com Joint Venture and its joint venturers, Hollywood Media and National Amusements,

Inc., as a result of various actions by AMC.

The amended complaint contends that when AMC’s demands for greater control

and a larger share of MovieTickets.com were not met, AMC breached and continues to breach the MovieTickets.com Joint Venture Agreement,

which obligates AMC to exclusively provide its ticket inventory to MovieTickets.com.

The amended complaint further specifies breaches

by AMC of its contractual and common law duties of good faith, fair dealing, and loyalty and violations of Florida’s Deceptive

and Unfair Trade Practices Act.

Among other things, the plaintiffs allege in the amended complaint that AMC used its inside

position with MovieTickets.com and access to MovieTickets.com’s proprietary information in order to advance AMC’s

own goals in contravention of its duty of loyalty to the joint venture and to the detriment of MovieTickets.com.

Hollywood Media and

3 unchanged sentences

AMC is obligated to make available on MovieTickets.com’s website AMC’s ticket inventory for sale on an exclusive basis

and to honor its’

contractual and common law fiduciary duties of good faith and loyalty.

Discovery is proceeding.

and to honor its contractual and common law fiduciary duties of good faith and loyalty to the MovieTickets.com Joint Venture and

its joint venturers, Hollywood Media and National Amusements, Inc.

Hollywood Media is

from time to time party to various other legal proceedings, including matters arising in the ordinary course of business.

Currently, the Company is unaware of any actual or threatened litigation against it.

from time to time party to various legal proceedings, including matters arising in the ordinary course of business.

the Company is unaware of any actual or threatened litigation against it.

(8) MOVIETICKETS.COM:

Hollywood Media owns

26.2% of the equity in MovieTickets.com, Inc.

as of September 30, 2012 and shares in 26.2% of the income or losses generated by

the joint venture.

This investment is recorded under the equity method of accounting, recognizing 26.2% of ownership of

MovieTickets.com income or loss as “Equity (losses) in earnings of unconsolidated investees”

in the accompanying condensed

consolidated balance sheets.

Hollywood Media recorded

its 26.2% share of net loss or $252,855 and $180,740 under “Earnings (Losses) of Unconsolidated Investees”

accompanying unaudited condensed consolidated statement of operations for the nine and three months ended September 30, 2012,

respectively.

Hollywood Media did not record $23,903 of its share of losses from MovieTickets.com for the nine and three months

ended September 30, 2012 respectively, because accumulated dividends and net losses from 2012 and prior years exceeded the Company’s

investment in MovieTickets.com as of September 30, 2012.

The Company recorded $409,232 and $230,164 in earnings of unconsolidated

investees for the nine and three months ended September 30, 2011, respectively.

On July 18, 2011 MovieTickets.com declared a dividend

of $4,000,000.

Hollywood Media received its 26.2% pro rata share of such dividend, amounting to $1,048,875 on July 19, 2011, which

reduced the Company’s investment in MovieTickets.com as the dividend did not exceed the amount of the Company’s investment.

Hollywood Media distributed, on July 19, 2011, $52,444 of such dividend distribution, representing 5% of Hollywood Media’s

share of the dividends, to each of Mr.

Rubenstein and Ms.

Silvers in accordance with their amended and restated employment agreements

dated December 23, 2009.

Other than the July 18, 2011 dividend discussed above, there were no dividends declared or received during

the nine and three months ended September 30, 2012 or during the year ended December 31, 2011.

For a description of the amended

and restated employment agreements with Mr.

Rubenstein and Ms.

Silvers, see Note 9, “Related Party Transactions”

these unaudited condensed consolidated financial statements.

Hollywood Media owns 26.2% of the equity

in MovieTickets.com, Inc.

as of March 31, 2013 and shares in 26.2% of the income or losses generated by the joint venture.

This investment is recorded under the equity method of accounting, recognizing 26.2% of ownership of MovieTickets.com income or

loss as “Equity in Earnings of Unconsolidated Investees”

in the accompanying unaudited condensed consolidated statements

of operations.

Hollywood Media

recorded its 26.2% share of net income or $48,919 under “Earnings of unconsolidated investees”

in the accompanying

unaudited condensed consolidated statement of operations for the three months ended March 31, 2012.

Hollywood Media did not record

$410,249 of its share of losses from MovieTickets.com for 2012 and the three months ended March 31, 2013 because accumulated dividends

and net losses from 2013 and prior years exceed the Company’s investment in MovieTickets.com as of March 31, 2013.

There were no dividends declared or received during the three months ended March 31, 2013 or during the three months ended March

PARTY TRANSACTIONS:

Project Hollywood LLC

Hollywood Media recorded

$197,517 in earn-out gain from R&S Investments, LLC ("R&S Investments") during the three months ended March

As of March 31, 2013, the Company had $30,929 included in “Related Party Receivable”

in our accompanying

unaudited condensed consolidated balance sheet which primarily consisted of expense reimbursements from R&S Investments.

of December 31, 2012, the Company had $37,287 included in “Related Party Receivable”

in our accompanying consolidated

balance sheet which primarily consisted of expense reimbursements from R&S Investments.

During the year ended December

31, 2012, Hollywood Media received such earn-out amounts and expense reimbursements in accordance with the payment terms.

Pursuant to the R&S

Agreement dated August 28, 2012, in exchange for the Buyout Amount, which payment has been made to Hollywood Media, R&S Investments

fully satisfied all of its obligation to pay the purchase price under Section 3.1 of the R&S Purchase Agreement and any additional

consideration or earnout payment under Section 3.3 of the R&S Purchase Agreement, and R&S Investments shall have no further

obligations and/or liabilities (and Hollywood Media shall have no further rights and/or remedies) under Article III of the R&S

Purchase Agreement or otherwise.

Accordingly, the earnout receivable from R&S Investments was $0 as of December 31,

2012 and March 31, 2013.

See Note 3, “Discontinued Operations”

to these unaudited condensed consolidated financial

statements for more information on the R&S Agreement, the Buyout Amount and this transaction.

On October 27, 2011,

following Project Hollywood LLC’s acquisition of all of the membership interests of Baseline LLC, Hollywood Media acquired

a 21.74% ownership interest in Project Hollywood LLC for $1.25 million, which was contributed to Project Hollywood LLC and which

was based on the same per membership unit price paid by Baseline Holdings for its 78.26% ownership interest in Project Hollywood

The funds contributed were used for working capital and other capital needs of the Baseline StudioSystems business.

Project Hollywood

entered into two agreements with the two former senior executives of Baseline StudioSystems to manage the business on a day-to-day

basis, as of December 1, 2011.

Under those agreements, the managers will each receive 7.5% of Project Hollywood LLC’s membership

units subject to a three year vesting schedule (at a rate of 2.5% per annum) and the obtaining of certain performance-based EBITDA

hurdles each year.

Under that vesting schedule, Hollywood Media’s ownership in Project Hollywood was reduced to 20.65% at

June 30, 2012.

following Project Hollywood's acquisition of all of the membership interests of Baseline LLC, Hollywood Media acquired a 21.74%

ownership interest in Project Hollywood for $1.25 million, which was contributed to Project Hollywood and which was based on the

same per membership unit price paid by Baseline Holdings LLC for its 78.26% ownership interest in Project Hollywood.

funds contributed were used for working capital and other capital needs of the Baseline StudioSystems business.

Project Hollywood entered into two agreements with the two former senior executives of Baseline StudioSystems to manage the business

on a day-to-day basis, as of December 1, 2011.

Under those agreements, the managers will each receive 7.5% of Project Hollywood

membership units subject to a three year vesting schedule (at a rate of 2.5% per annum) and the obtaining of certain performance-based

EBITDA hurdles each year.

Under that vesting schedule, Hollywood Media’s ownership in Project Hollywood was reduced

to 20.65% at June 30, 2012.

Distributions of $130,683

$176,866 and $182,617 from Project Hollywood to Hollywood Media reduced Hollywood Media’s investment in Project Hollywood

during the year ended December 31, 2011 and the nine months ended September 30, 2012, respectively.

On August 28, 2012,

Hollywood Media entered into an Assignment and Assumption of Membership Interest and Waiver (the “Assignment”) with

Baseline Holdings LLC (“Baseline Holdings”), Project Hollywood LLC, Mitchell Rubenstein and Laurie S.

Holdings is wholly-owned by Mr.

Rubenstein, Hollywood Media’s Chief Executive Officer and Chairperson of the Board, and

to Hollywood Media reduced Hollywood Media’s investment in Project Hollywood during the three months ended March 31, 2012.

28, 2012, Hollywood Media entered into an Assignment and Assumption of Membership Interest and Waiver (the “Assignment”)

with Baseline Holdings LLC (“Baseline Holdings”), Project Hollywood, Mitchell Rubenstein and Laurie S.

Baseline Holdings is wholly-owned by Mr.

Rubenstein, Hollywood Media’s Chief Executive Officer and Chairperson of the Board,

Silvers, Hollywood Media’s President, Secretary and Vice-Chairperson of the Board.

As described below, the Assignment

and the transactions contemplated by the Assignment were approved by a Special Committee of Hollywood Media’s Board of Directors

comprised solely of independent directors (the “Special Committee”).

As described below, the

Assignment and the transactions contemplated by the Assignment were approved by a Special Committee of Hollywood Media’s

Board of Directors comprised solely of independent directors (the “Special Committee”).

Pursuant to the Assignment,

5 unchanged sentences

Rubenstein waived his right to receive any future principal and interest owed by Key Brand to Hollywood Media pursuant to the

Loan (as of August 28, 2012, Mr.

Rubenstein had the right to receive 4.76% of the principal, or $404,600, and interest

on account of the Loan), and (3) Ms.

Silvers waived her right to receive any future principal and interest owed by Key Brand

to Hollywood Media pursuant to the Loan (as of August 28, 2012, Ms.

Silvers has the right to receive 1.94% of the principal,

or $164,900, and interest on account of the Loan).

$8,500,000 portion of the Loan (as of August 28, 2012, Mr.

Rubenstein had the right to receive 4.76% of the principal,

or $404,600, and interest on account of the $8,500,000 portion of the Loan), and (3) Ms.

Silvers waived her right to receive

any future principal and interest owed by Key Brand to Hollywood Media pursuant to the $8,500,000 portion of the Loan (as of August 28, 2012,

Silvers has the right to receive 1.94% of the principal, or $164,900, and interest on account of the $8,500,000 portion of

Hollywood Media recorded the fair value of the waivers by Mr.

Rubenstein and

Silvers in the long term portion of “Other Assets”

in the accompanying condensed consolidated balance sheets.

Hollywood Media acquired its membership interest in Project Hollywood on October 27, 2011 for $1,250,000.

Rubenstein and Ms.

Silvers in the long term portion of

“Other Assets”

in the accompanying unaudited condensed consolidated balance sheets.

As described above, Hollywood

Media acquired its membership interest in Project Hollywood on October 27, 2011 for $1,250,000.

As a result of the

3 unchanged sentences

all payments of principal and interest made by Key Brand under the Loan.

As of August 28, 2012 and September 30, 2012, the principal

balance due under the Loan was $8,500,000.

As of October 1, 2012, the principal balance due under the Loan increased to $15,500,000

as a result of the achievement of the revenue threshold for the Second $7 Million Earnout in the Purchase Agreement.

As of August 28, 2012, the principal balance due under

the Loan was $8,500,000.

As of October 5, 2012, the principal balance due under the Loan increased to $15,500,000 as a result

of the achievement of the revenue threshold for the Second $7 Million Earnout in the Purchase Agreement.

The Special Committee

6 unchanged sentences

of view to Hollywood Media.

R&S Investments

Hollywood Media recorded

$412,684 and $85,926 in earnout gain from R&S Investments, LLC during the nine and three months ending September 30, 2012,

respectively, which is included in “Income (loss) from discontinued operations”

recorded in the accompanying condensed

consolidated statement of operations.

As of September 30, 2012, the Company has $35,735 included in “Related party receivable”

in our accompanying condensed consolidated balance sheets which consisted of $35,371 in expense reimbursements from R&S Investments,

LLC and $364 for an expense reimbursement receivable from MovieTickets.com.

Pursuant to the R&S

Agreement dated August 28, 2012, in exchange for the Buyout Amount, which payment has been made to Hollywood Media, R&S Investments

fully satisfied all of its obligation to pay the purchase price under Section 3.1 of the R&S Purchase Agreement and any additional

consideration or earnout payment under Section 3.3 of the R&S Purchase Agreement, and R&S Investments shall have no further

obligations and/or liabilities (and Hollywood Media shall have no further rights and/or remedies) under Article III of the R&S

Purchase Agreement or otherwise.

Accordingly, the earnout receivable from R&S Investments, LLC was $0 as of September 30,

See Note 3, “Discontinued Operations”

to these unaudited Condensed Consolidated Financial Statements for more

information on the Buyout Amount and this transaction.

Hollywood Media recorded

$460,037 and $155,538 in earnout gain from R&S Investments, LLC during the nine and three months ending September 30, 2011

respectively, which is included in “Income (loss) from discontinued operations”

recorded in the accompanying condensed

consolidated statement of operations.

As of December 31, 2011, the Company has $521,497 included in “Related party receivable”

in our accompanying consolidated balance sheets which consisted of $371,353 in earnout receivable, $105,561 in distributions receivable

from Project Hollywood, $36,106 in expense reimbursements from R&S Investments, $5,904 for an expense reimbursement receivable

from MovieTickets.com and $2,573 for a combined receivable from Mr.

Rubenstein and Ms.

R&S Investments, LLC Indemnification

On November 5, 2010,

Hollywood.com, LLC, a former subsidiary of the Company, was sued for copyright infringement for the alleged display of unlicensed

celebrity photographs on the hollywood.com website, which is owned by Hollywood.com, LLC.

Certain of the celebrity photographs

at issue were posted during the time that Hollywood Media.

owned Hollywood.com.

Because Hollywood Media owned Hollywood.com during

part of the time that the alleged display of unlicensed celebrity photographs on the hollywood.com website occurred, the possibility

exists that Hollywood Media could be subject to claims relating to this matter and other similar claims.

To address the potential

risks to Hollywood Media associated with any such claims, in February 2011, Hollywood Media entered into an indemnification agreement

with R&S Investments, LLC, whereby R&S Investments, LLC agreed to indemnify and hold Hollywood Media harmless from any

and all potential liabilities and claims against Hollywood Media arising from any such claims in exchange for a one-time cash

payment by Hollywood Media to R&S Investments, LLC of $350,000.

The indemnification agreement was approved on behalf of Hollywood

Media by a Special Committee of Hollywood Media’s Board of Directors comprised solely of independent Directors.

Amended and Restated Employment Agreements

1 unchanged sentence

On December 23, 2009,

(i) Hollywood Media and Mitchell Rubenstein entered into an amendment to his amended and restated employment agreement (“Rubenstein

Employment Agreement”) and (ii) Hollywood Media and Laurie S.

Silvers entered into an amendment to her amended and restated

employment agreement (“Silvers Employment Agreement”) (hereafter, collectively referred to as “Amendments to

Employment Agreements).

The Amendments to Employment Agreements provided for, among other things, the following:

For a period of ninety days after the closing of the sale of Theatre

(i) Hollywood Media and Mitchell Rubenstein entered into an amendment to his amended and restated employment agreement (as amended,

the “Rubenstein Employment Agreement”) and (ii) Hollywood Media and Laurie S.

Silvers entered into an amendment to

her amended and restated employment agreement (as amended, the “Silvers Employment Agreement”) which amendments provided

for, among other things, the following:

a period of ninety days after the closing of the sale of Theatre

Rubenstein’s and Ms.

Silvers’

compensation continued in accordance with then existing terms.

After this ninety-day period, Mr.

continued in accordance with then existing terms.

this ninety-day period, Mr.

Rubenstein and Ms.

Silvers base salaries

were each reduced to a nominal amount of $1 per year plus each is entitled to five percent (5%) of the sum of (i) any distributions

and other proceeds Hollywood Media receives after such ninety-day period in connection with its ownership interest in MovieTickets.com,

and (ii) certain other amounts that may be received by Hollywood Media from MovieTickets.com, Inc.

((i) and (ii) are

referred to herein as the “5% Distribution”).

salaries were each reduced to a nominal amount of $1 per year

plus each is entitled to five percent (5%) of the sum of (i)

any distributions and other proceeds Hollywood Media receives

after such ninety-day period in connection with its ownership

interest in MovieTickets.com, Inc.

and (ii) certain other amounts

that may be received by Hollywood Media from MovieTickets.com,

((i) and (ii) are referred to herein as the “5% Distribution”).

Upon a sale of Hollywood Media’s interest in MovieTickets.com,

Rubenstein and Ms.

Silvers would each also receive 5% of the proceeds received by Hollywood Media in such sale.

Should the employment agreements be terminated by Hollywood Media without “cause”, by death or by Mr.

Silvers would each also receive

5% of the proceeds received by Hollywood Media in such sale.

Should the employment agreements be terminated by Hollywood

Media without “cause”, by death or by Mr.

Silvers, as applicable, for “good reason”

the 5% Distributions and 5% of proceeds upon sale are due

the 5% Distributions and 5% of proceeds upon sale are due to

Rubenstein and Ms.

Silvers or their heirs regardless of whether or not Mr.

Silvers or their heirs regardless of

whether or not Mr.

Rubenstein and/or Ms.

1 unchanged sentence

the employment of the Company.

A deferment by Mr.

deferment by Mr.

Rubenstein and Ms.

Silvers of $812,501 and

respectively otherwise due to them as change of control payments upon the consummation of the sale of Theatre Direct (referred

to herein as the “Deferred Change in Control Payments”).

$332,189, respectively otherwise due to them as change of control

payments upon the consummation of the sale of Theatre Direct

(referred to herein as the “Deferred Change in Control

Payments”).

On August 28, 2012,

1 unchanged sentence

Agreement”) regarding the Purchase Agreement dated as of August 21, 2008 between Hollywood Media and R&S Investments,

as amended (the “R&S Purchase Agreement”) and (2) Hollywood Media, Mr.

as amended (the “R&S Purchase Agreement”), (2) Hollywood Media, Mr.

Rubenstein and Ms.

Silvers entered into

a letter agreement regarding the R&S Agreement (the “Rubenstein Silvers Letter Agreement”).

R&S Investments

is wholly-owned by Mr.

Silvers entered into a

letter agreement regarding the R&S Agreement (the “Rubenstein Silvers Letter Agreement”), and (3) R&S Investments

provided Hollywood Media with a letter regarding a contingent additional payment (the “R&S Letter”).

Investments is wholly-owned by Mr.

Rubenstein and Ms.

See Note 3, “Discontinued Operations”

to these unaudited Condensed

Consolidated Financial Statements.

unaudited condensed consolidated financial statements for more information on the R&S Agreement, the Rubenstein Silvers Letter

Agreement and the R&S Letter and the transactions contemplated by the R&S Agreement, the Rubenstein Silvers Letter Agreement

and the R&S Letter.

Pursuant to the R&S

6 unchanged sentences

Silvers Letter Agreement, Mr.

Rubenstein agreed that that, in connection with the transaction consummated under the R&S Agreement

Rubenstein agreed that, in connection with the transaction consummated under the R&S Agreement

and in addition to the Buyout Amount, the next $280,000 of the 5% Distribution that would be distributed by Hollywood Media to

Rubenstein pursuant to his amended employment agreement will be retained by Hollywood Media (and not paid to Mr.

Rubenstein pursuant to the Rubenstein Employment Agreement will be retained by Hollywood Media (and not paid to Mr.

and is a reduction to “Derivative Liabilities”

in the accompanying condensed consolidated balance sheets.

in the accompanying unaudited condensed consolidated balance sheets.

In addition, pursuant

3 unchanged sentences

Hollywood Media to Ms.

Silvers pursuant to her amended employment agreement will be retained by Hollywood Media (and not paid

Silvers pursuant to the Silvers Employment Agreement will be retained by Hollywood Media (and not paid

Silvers) and is a reduction to “Derivative Liabilities”

in the accompanying condensed consolidated balance

in the accompanying unaudited condensed consolidated

balance sheets.

Pursuant to the R&S

Letter, R&S Investments agreed that in the event of a sale of all the assets of Hollywood.com, LLC to one person or a group

of persons not controlled, directly or indirectly, by Mr.

Rubenstein and Ms.

Silvers or their heirs, personal representatives

or affiliates prior to August 31, 2015, R&S Investment shall pay to Hollywood Media $3,500,000 or, if less, the amount received by R&S Investments

in connection with such transaction.

Regardless of whether

4 unchanged sentences

Silvers, as applicable,

upon the receipt by Hollywood Media of payments pursuant to the $8.5 million credit agreement (the “Credit Agreement”)

entered into in connection with the sale of Theatre Direct, on a pro rata basis, and one-half of such payments were be paid to

upon the receipt by Hollywood Media of payments from Key Brand pursuant to the $8,500,000 credit agreement (the “Credit

Agreement”) entered into in connection with the sale of Theatre Direct, on a pro rata basis, and one-half of such payments

were be paid to Mr.

Rubenstein and/or Ms.

Silvers, as applicable, upon the receipt by Hollywood Media of payments under the first $7 million tranche

of the earnout in connection with the sale of Theatre Direct, on a pro rata basis.

On August 28, 2012,

Hollywood Media entered into an Assignment and Assumption of Membership Interest and Waiver (the “Assignment”) with

Baseline Holdings LLC (“Baseline Holdings”), Project Hollywood LLC (“Project Hollywood”), Mr.

Silvers, as applicable, upon the receipt by Hollywood Media of payments under the First

$7 Million Earnout under the Purchase Agreement entered into in connection with the sale of Theatre Direct, on a pro rata basis.

As described above,

on August 28, 2012, Hollywood Media entered into “the Assignment”

with Baseline Holdings, Project Hollywood, Mr.

Baseline Holdings is wholly-owned by Mr.

Rubenstein and Ms.

Pursuant to the Assignment,

Hollywood Media assigned to Baseline Holdings all of Hollywood Media’s membership interest in Project Hollywood in exchange

for total consideration of $1,800,000 (the “Project Hollywood Purchase Price”).

The Project Hollywood Purchase Price

was paid as follows:

(1) $1,230,500 in cash (which was paid by Baseline Holdings to Hollywood Media), (2) Mr.

Rubenstein waived

his right to receive any future principal and interest owed to Hollywood Media pursuant to the Loan under the Credit Agreement

(as of August 28, 2012, Mr.

Rubenstein had the right to receive 4.76% of the principal, or $404,600, and interest on

account of the Loan under the Credit Agreement), and (3) Ms.

Silvers waived her right to receive any future principal and interest

owed to Hollywood Media under the Loan under the Credit Agreement (as of August 28, 2012, Ms.

Silvers has the right to receive

1.94% of the principal, or $164,900, and interest on account of the Loan under the Credit Agreement).

Hollywood Media had acquired

its membership interest in Project Hollywood on October 27, 2011 for $1,250,000.

Hollywood Media recorded the fair value of the

waivers by Mr.

Pursuant to the Assignment, Hollywood

Media assigned to Baseline Holdings all of Hollywood Media’s membership interest in Project Hollywood in exchange for total

consideration of $1,800,000 (the “Project Hollywood Purchase Price”), which interest Hollywood Media had acquired

on October 27, 2011 for $1,250,000.

The Project Hollywood Purchase Price was paid as follows:

(1) $1,230,500 in cash (which

was paid by Baseline Holdings to Hollywood Media), (2) Mr.

Rubenstein waived his right to receive any future principal and interest

owed to Hollywood Media pursuant to the Loan under the Credit Agreement (as of August 28, 2012, Mr.

Rubenstein had the

right to receive 4.76% of the principal, or $404,600, and interest on account of the Loan under the Credit Agreement), and (3)

Silvers waived her right to receive any future principal and interest owed to Hollywood Media under the Loan under the Credit

Agreement (as of August 28, 2012, Ms.

Silvers has the right to receive 1.94% of the principal, or $164,900, and interest on account

of the Loan under the Credit Agreement).

Hollywood Media recorded the fair value of the waivers by Mr.

Rubenstein and Ms.

Silvers in the long term portion of “Other Assets”

in the accompanying condensed

consolidated balance sheets.

in the accompanying unaudited condensed consolidated balance sheets.

On October 1, 2012,

Hollywood Media received the first $7 million tranche of the earnout pursuant to the Broadway Sale.

As a result, in connection

with the Deferred Change in Control Payments due to Mr.

Hollywood Media received the First $7 Million Earnout under the Purchase Agreement entered into in connection with the sale of

Theatre Direct.

In connection with the Deferred Change in Control Payments due to Mr.

Rubenstein and Ms.

Silvers in connection with the Broadway Sale, on October

Silvers in connection

with the sale of Theatre Direct, Mr.

Rubenstein received $405,300 of such earnout payment and Ms.

Silvers received $165,200 of such earnout payment.

From time to time

the Company’s Compensation Committee may award discretionary bonuses to Mr.

Rubenstein and Ms.

Silvers based on their service

or performance to the Company.

Rubenstein and Ms.

Silvers received no bonuses during the three months ended September 30,

Rubenstein received a bonus of $225,000 and Ms.

Silvers received a bonus of $200,000 during the three months ended June

Bonuses are included in “Payroll and benefits”

in the accompanying unaudited condensed consolidated statements

of operations.

Rubenstein and Ms.

Silvers have notified the Compensation Committee that each of them plans to voluntarily

waive the first $225,000 (in the case of Mr.

Rubenstein) and the first $200,000 (in the case of Ms.

Silvers) of the 5% Distribution

each of them would be entitled to receive of the 5% Distribution.

(10) SUBSEQUENT

The First $7 Million

Earnout was paid by Key Brand to the Company on October 1, 2012 and was recorded upon collection of the $7 million received on

October 1, 2012.

In addition, the revenue calculation for the “Second Earnout”

was modified to exclude “group

(and the revenues of the new joint venture conducting such business) and the target for the Second $7 Million Earnout

was reduced from $150 million to $123 million accordingly.

On October 5, 2012, Hollywood Media received written notice from Key

Brand that Theatre Direct achieved the revenue target for the Second $7 Million Earnout in Key Brand’s fiscal year ended

June 30, 2012.

Accordingly, pursuant to the Amendment, the Second $7 Million Earnout of $7 million was added as of October 1,

2012 to the principal amount of the Loan under the Credit Agreement.

Pursuant to the Credit Agreement, interest at a rate of 12%

per annum and principal on such Second $7 Million Earnout will be amortized over the term of the Credit Agreement in equal quarterly

installments through the maturity date of the Loan on December 15, 2015.

As a result of the Second $7 Million Earnout being added

to the $8.5 million principal amount of the Loan, the principal amount of the Loan due Hollywood Media by Key Brand was $15.5

million as of October 1, 2012.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

Silvers received $165,200 of

such earnout payment on October 5, 2012.

Tekno Books Advertising

On March 5, 2013,

in connection with the reorientation process of Tekno Books from print to digital distribution, Hollywood Media entered into an

advertising agreement with MovieTickets.com for $469,000 whereby Hollywood Media paid this amount for advertisements starting

in the second quarter of 2013 which will be expensed as the advertisements run.

Of this amount, $100,000 is an advance against a

fee of $1 per digital book to MovieTickets.com for books sold via MovieTickets.com.

The $469,000 is included in “Prepaid

expenses”

in the accompanying unaudited condensed consolidated balance sheet at March 31, 2013.

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

27 unchanged sentences

the market price of our common stock include, but are not limited to:

continuing operating

operating losses;

cash flows and

8 unchanged sentences

movie ticketing

service and the

outcome of, and

potential impact

service and other

competitors, and

the outcome of,

and potential impact

of matters relating

8 unchanged sentences

about such lawsuit,

see Note 7 “Certain

see Part II, Item

1 (Legal Proceedings)

of this Quarterly

Report on Form

10-Q and Note 7

“Certain

Commitments and

1 unchanged sentence

in the Notes to

the Condensed Consolidated

Financial Statements

included in Part

I, Item 1 of this

Quarterly Report

on Form 10-Q);

the unaudited condensed

consolidated financial

statements included

in Part I, Item

1 of this Quarterly

Report on Form

MovieTickets.com

Inc.’s ability

to compete with

the other online

movie ticketing

services following

the departure of

AMC Entertainment,

Inc., MovieTickets.com

Inc.’s largest

exhibitor in terms

of ticket sales,

to MovieTickets.com

Inc.’s competition.

ability to maintain

28 unchanged sentences

Market, the NYSE

Amex (formerly

the American Stock

Exchange) or the

over-the-counter

MKT or the over-the-counter

impact of the death

of Tekno Books’

former Chief Executive

Greenberg, on the

ability of Tekno

Books to maintain

relationships it

has with certain

authors and publishers;

possibility of

2 unchanged sentences

Entertainment Inc.

("Key Brand")

in connection with

4 unchanged sentences

Second Lien Credit,

Security Pledge

Security and Pledge

Agreement dated

3 unchanged sentences

Direct NY, Inc.

Key Brand Entertainment

Inc., and Hollywood

Media (the “Credit

Agreement”);

impact of the death

of Tekno Books’

former Chief Executive

Greenberg, on the

ability of Tekno

Books to maintain

relationships it

has with certain

authors and publishers;

("Theatre

Direct"),

Key Brand, and

Hollywood Media,

as amended (the

“Credit Agreement”);

timing and amount

8 unchanged sentences

stock of Theatre

Direct NY, Inc.

issued to us by

Theatre Direct

to that certain

Stock Purchase

Direct issued to

us by Theatre Direct

pursuant to that

certain Stock Purchase

Agreement, dated

3 unchanged sentences

Media and Key Brand,

Entertainment Inc.

as amended (the

24 unchanged sentences

Direct and Theatre.com.

On December 15, 2010, we completed the sale of our Broadway Ticketing Business through the sale of all

of the outstanding capital stock of Theatre Direct to Key Brand, as contemplated by the Purchase Agreement.

Following this sale,

our business segments for our continuing operations are as follows:

● Ad Sales –

includes Hollywood Media’s 26.2% equity interest

On December 15, 2010, we completed the Broadway Sale through the sale of all of the outstanding capital

stock of Theatre Direct to Key Brand, as contemplated by the Purchase Agreement.

Following this sale, our business segments for

our continuing operations are as follows:

Sales –

includes Hollywood

Media’s 26.2%

equity interest

in MovieTickets.com.

Prior to the sale of Cinemasource

UK Limited on May 1, 2012 (which business included

UK Theatres Online Limited, Spring Leisure Limited,

Cinemasonline Limited and WWW.CO.UK Limited), the

Ad Sales segment also sold advertising on plasma TV

displays throughout the U.K.

and Ireland, on lobby

display posters, movie brochure booklets and ticket

wallets distributed in cinemas, live theater and other

entertainment venues in the U.K.

Note 3, “Discontinued Operations”

Notes to the Condensed Consolidated Financial Statements

included in Part I, Item I of this Quarterly Report

on Form 10-Q for information on the sale of Cinemasource

Prior to the sale

of Cinemasource

UK Limited on May

1, 2012 (which

business included

UK Theatres Online

Limited, Spring

Leisure Limited,

Cinemasonline Limited

and WWW.CO.UK Limited),

the Ad Sales segment

also sold advertising

on plasma TV displays

throughout the

on lobby display

posters, movie

brochure booklets

and ticket wallets

distributed in

cinemas, live theater

and other entertainment

venues in the U.K.

Note 3, “Discontinued

Operations”

in the Notes to

the unaudited condensed

consolidated financial

statements included

in Part I, Item

I of this Quarterly

Report on Form

10-Q for information

on the sale of

Cinemasource UK

7, “Certain

Commitments and

Contingencies”

in the Notes to

the unaudited condensed

consolidated financial

statements included

in Part I, Item

I of this Quarterly

Report on Form

10-Q for information

on the AMC litigation.

Properties –

8 unchanged sentences

book and other

also includes our

wholly-owned subsidiary,

Tekno Books, a

book development

business, and this

segment does not

include our 50%

interest in NetCo

Partners, for purposes

of this discussion

includes our wholly-owned

subsidiary, Tekno

Books, and a book

development business,

and this segment

does not include

our 50% interest

in NetCo Partners,

for purposes of

this discussion

and analysis.

are beginning a

reorientation process

of this business

from print to digital

distribution.

comprised of payroll

27 unchanged sentences

interest in Project

Hollywood (which

was reduced from

21.74% of the total

equity in Project

Hollywood to 20.65%

of the total equity

Hollywood, LLC

("Project

Hollywood")

(which was reduced

from 21.74% of

the total equity

in Project Hollywood

to 20.65% of the

total equity in

Project Hollywood

at June 30, 2012),

13 unchanged sentences

interest in Project

Hollywood, LLC

and the change

in Hollywood Media’s

equity interest

in Project Hollywood,

see Note 9, “Related

Hollywood and the

change in Hollywood

Media’s equity

interest in Project

Hollywood, see

Note 9, “Related

Party Transactions”

in the Notes to

the Condensed Consolidated

Financial Statements

included in Part

I, Item I of this

Quarterly Report

on Form 10-Q.

the unaudited condensed

consolidated financial

statements included

in Part I, Item

I of this Quarterly

Report on Form

Results of Operations

8 unchanged sentences

The following table summarizes Hollywood Media’s revenues,

operating expenses and operating income (loss) from continuing operations by reportable segment for the nine months ended September

30, 2012 (“Y3-12”) and 2011 (“Y3-11”) and the three months ended September 30, 2012 (“Q3-12”)

and 2011 (“Q3-11”), respectively:

operating expenses and operating income (loss) from continuing operations by reportable segment for the three months ended March

31, 2013 (“Q1-13”) and 2012 (“Q1-12”), respectively:

Operating Expenses

2 unchanged sentences

$ (1,369,863 )

% of Total Net Revenue

Operating Expenses

Operating Income (Loss)

$ (5,062,595 )

$ (4,997,504 )

Operating Expenses

Operating Loss

$ (1,002,961 )

$ (1,058,476 )

Operating Expenses

Operating Loss

$ (1,768,911 )

$ (1,778,845 )

% of Total Net Revenue

Results of Discontinued Operations

Sale of Broadway Ticketing Division

to Key Brand Entertainment, Inc.

Sale of Cinemasource UK Limited - Share

Purchase Agreement

On May 1, 2012, the

Company entered into a share purchase agreement (the “Share Purchase Agreement”) with Orchard Advertising Limited

(“Buyer”), pursuant to which the Company sold, and Buyer purchased, the entire issued share capital of Cinemasource

UK Limited (the “Purchased Shares”) which business was part of the Company’s Ad Sales division and included

UK Theatres Online Limited, Spring Leisure Limited, Cinemasonline Limited and WWW.CO.UK Limited.

As of the closing

of the transactions contemplated by the Share Purchase Agreement, (1) Jeffrey Spector, a director of Buyer, was also (i) a director

of all four subsidiaries of Cinemasource UK Limited (UK Theatres Online Limited, Spring Leisure Limited, Cinemasonline Limited

and WWW.CO.UK Limited) and (ii) an employee of one of the subsidiaries of Cinemasource UK Limited (UK Theatres Online)

and (2) Janette Erskine, a director of Buyer, was also (i) a director of three subsidiaries of Cinemasource UK Limited (UK Theatres

Online Limited, Spring Leisure Limited and Cinemasonline Limited) and (ii) an employee of one of the subsidiaries of Cinemasource

UK Limited (UK Theatres Online).

Pursuant to the Share

Purchase Agreement, the purchase price for the Purchased Shares is U.S.

$250,000, payable in cash in a non-interest bearing loan

in twenty equal quarter-annual installments of $12,500 each over a period of five years.

Subject to the terms and conditions

of the Share Purchase Agreement, the first installment of the purchase price was due and was paid to the Company on July 31, 2012

and subsequent installments of the purchase price are due every three calendar months thereafter.

Hollywood Media received

such payments in accordance with the payment terms.

The Company imputed interest at 16.5% per annum on this non-interest

bearing loan resulting in a discounted amount of $168,014 which was included in the total gain on sale attributable to the sale

of Cinemasource UK Limited of $649,215.

The current portion of the discounted amount of the non-interest bearing loan is

included in “Notes receivable, current”

and the long-term portion of the non-interest bearing loan is included in

“Notes receivable, less current portion”

in our accompanying unaudited condensed consolidated balance sheets contained

in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The purchase price

for the Purchased Shares is collateralized by a lien on the Purchased Shares (and certain dividends, payments or other derivative

assets received in respect of the Purchased Shares) pursuant to the terms of the share charge deed, dated as of May 1, 2012, between

the Company and Buyer (the “Share Charge Deed”).

Except as permitted by the Share Purchase Agreement, the Share Charge

Deed also restricts Buyer from (i) permitting any other lien to exist against the Purchased Shares (and certain dividends, payments

or other derivative assets received in respect of the Purchased Shares), (ii) selling or transferring the Purchased Shares (and

certain dividends, payments or other derivative assets received in respect of the Purchased Shares), and (iii) disposing of the

equity of redemption in respect of the Purchased Shares (and certain dividends, payments or other derivative assets received in

respect of the Purchased Shares).

In the event of (i) a transaction whereby any persons or group of persons acting in concert

purchase at least 80% of the Purchased Shares or at least 80% of the issued share capital of each of the subsidiaries of Cinemasource

UK Limited or Buyer, or (ii) a transaction whereby any person or group of persons acting in concert purchase the whole or substantially

the whole of the business and assets of Cinemasource UK Limited and its subsidiaries (each, an “Exit Event”), then

(A) if the proposed purchaser in such Exit Event is a “connected person”

to Buyer (as defined in the Share Purchase

Agreement) or if the aggregate consideration payable to Buyer, Cinemasource UK Limited and its subsidiaries, and/or the shareholders

of Buyer in respect of an Exit Event (the “Subsequent Sale Proceeds”) exceeds the balance of the purchase price remaining

to be paid by Buyer to the Company under the Share Purchase Agreement (the “Balance”), then the Balance shall become

immediately payable to the Company or (B) if the proposed purchaser is not a “connected person”

to Buyer and the Subsequent

Sale Proceeds are less than the Balance, then Buyer will pay to the Company the amount of the Subsequent Sale Proceeds in lieu

of the Balance, unless the Company demands that the Purchased Shares are transferred back to the Company (and Buyer transfers

the Purchased Shares back to the Company) in satisfaction of the Balance.

Sale of Broadway

Ticketing Business Unit to Key Brand Entertainment, Inc.

On December 15, 2010,

Hollywood Media Corp.

(“Hollywood Media”) completed the sale of its Broadway Ticketing Division (“the Broadway

Sale”) through the sale of all of the outstanding capital stock of Theatre Direct NY, Inc.

(“Theatre Direct”)

to Key Brand Entertainment Inc.

(“Key Brand”), as contemplated by the Stock Purchase Agreement, dated as of December

22, 2009, as amended, entered into between Hollywood Media and Key Brand (“the Purchase Agreement”).

material relationships among Hollywood Media and Key Brand or any of their respective affiliates other than in respect of the

Purchase Agreement and the related ancillary agreements.