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Item 1A. Risk Factors

2023-03-31 compared with 2013-04-01 · 275 added, 412 removed, 2 unchanged (100% of the section changed)

Risk Factors.

Risks of Investing in Our Shares

Investments in our

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

Investors should carefully consider the following matters, as

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

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

results of operations, financial condition, or prospects could be substantially harmed, which would adversely affect your investment.

Additional risks and uncertainties may also impair our business, operating results, financial condition, and prospects.

We have a history

of losses in our continuing operations.

We had a loss from

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

We may incur additional losses in the future.

Because Theatre

Direct represented a substantial portion of our business, following the Broadway Sale our business is substantially different.

Theatre Direct, which

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

“Broadway Sale”).

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

business is subject to certain risks, including those described below.

If any of the events described in the following risk factors actually

occurs then our business, results of operations and financial condition could be materially adversely affected.

More detailed information

concerning these risks is contained in other sections of this registration statement, including “Business” and “Management’s

Discussion and Analysis of Financial Condition and Results of Operations.”

Relating to our Business

are a holding company the principal assets of which are illiquid, ownership interests in NewStem and NetCo.

Company’s primary assets are equity interests in NewStem and NetCo.

Our President and Executive Chairman, Jan Loeb, is

also the Chairman of NewStem and through this shared management structure along with our 30.58% ownership interest in NewStem, we are

able to exert significant influence over the operations of NewStem.

Additionally, we are a 50% partner in NetCo and through our ownership

interest, are able to exert significant influence over this entity and its operations.

conduct no other business and, as a result, we depend entirely upon earnings and cash flow from NewStem and NetCo.

in the future to pay dividends, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt

of dividends or other payments from our operating subsidiaries.

investments in NewStem and NetCo are illiquid.

shares in NewStem and our ownership interest in NetCo are illiquid and have extremely limited liquidity rights.

The transferability

of these interests is restricted under federal and state securities laws and the governing documents of each of NewStem and NetCo.

depend on our executive officers and consultants and other key individuals along with the executive officers and key individuals of NewStem

to continue the implementation of our long-term business strategy and could be harmed by the loss of their services and our inability

to make up for such loss with qualified replacements.

believe that our continued growth and future success will depend in large part on the skills of our management team and the management

teams of NewStem and NetCo, and our partners’ respective abilities to motivate and retain these individuals and

other key individuals.

Jan Loeb, our President and Executive Chairman, is also the Chairman of NewStem, and therefore has the shared

responsibility of growing the business and operations of NewStem.

The loss of any of their service could reduce our ability to successfully

implement our long-term business strategy which may result in a loss of revenue, and the value of our common stock could be materially

adversely affected.

Leadership changes will occur from time to time and we cannot predict whether significant resignations will occur

or whether NewStem will be able to recruit additional qualified personnel.

We believe these management teams possess valuable knowledge

about our, NewStem’s and NetCo’s respective industries and that their knowledge and relationships would be very difficult

to replicate.

The loss of key personnel, or the inability to recruit and retain qualified and talented personnel in the future, could

have an adverse effect on the respective businesses of NewStem and NetCo, and, consequently, our business, financial condition and/or

operating results.

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

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

Our results of operation

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

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

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

with the Broadway Sale is inhibited in any way.

We may not receive

the payments due under the Credit Agreement in the Broadway Sale transaction.

Pursuant to the Intercreditor

Agreement, Key Brand’s obligations under the Credit Agreement are subordinated to up to $15 million of certain senior indebtedness

of Key Brand and our ability to exercise remedies upon a default under the Credit Agreement are subject to certain limitations.

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

The financial

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

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

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

Key Brand’s

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

and the Purchase Agreement.

Key Brand’s

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

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

There can be no assurances that

Key Brand will satisfy any or all of these obligations.

We are unable

to compete with Theatre Direct for 7 years from the date of closing of the transactions contemplated by the Purchase Agreement.

We have agreed that

Hollywood Media will not, and will cause its affiliates (as defined in the Purchase Agreement) not to, directly or indirectly,

own, manage, engage in, operate, control, work for or participate in the ownership, management, operation or control of, any business,

whether in corporate, proprietorship or partnership form or otherwise, engaged in the sales of tickets to live musical, live theatrical

or other live entertainment performances in the City of New York, New York or that otherwise competes with the business of Theatre

Direct and its subsidiaries as it exists as of the closing date, subject to certain exceptions, including that there are no restrictions

on the sale of advertisements (including online advertising).

Accordingly, subject to these exceptions, the non-competition agreement

restricts our ability to engage in any business which competes with Theatre Direct for 7 years from the date of closing of the

transactions contemplated by the Purchase Agreement.

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

After estimating future

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

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

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

The valuation methodologies

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

to such methodologies may never be realized.

See Note 7, “Fair

Value of Financial Instruments and Concentration of Credit Risk”

in the Notes to the Consolidated Financial Statements contained

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

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

Our reporting obligations

public company were not affected as a result of completing the Broadway Sale.

For as long as we remain a public company,

we have an obligation to continue to comply with the applicable reporting requirements of the Exchange Act, which includes the

filing with the SEC of periodic reports, proxy statements and other documents relating to our business, financial conditions and

other matters, even though compliance with such reporting requirements is economically burdensome.

Following the

Broadway Sale, we may be deemed an Investment Company and subjected to related restrictions under the Investment Company Act of

The regulatory scope

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

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

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

The Investment Company Act may, however, also be

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

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

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

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

Nevertheless, there can

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

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

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

of securities.

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

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

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

In the event of the characterization

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

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

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

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

Our business is now

smaller as a result of the Broadway Sale, and therefore we may fail to satisfy the continued listing standards of the NASDAQ Global

In the event that we are unable to satisfy the continued listing standards of the NASDAQ Global Market, our common stock

may be delisted from that market.

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

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

Listing Rule 5450(b).

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

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

and holders of record).

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

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

equity of at least $10 million, (ii)

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

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

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

If we are delisted

from the NASDAQ Global Market, we may apply to transfer our common stock listing to the NASDAQ Capital Market.

However, our application

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

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

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

stock could be delisted from the NASDAQ Capital Market.

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

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

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

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

If our common stock were to be delisted from the

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

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

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

As a result, an investor would find it more difficult

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

If our common stock

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

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

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

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

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

exchange or quoted on the NASDAQ Stock Market that has a market price of less than $5.00 per share, subject to certain exceptions).

Many brokerage firms are reluctant to recommend low-priced stocks to their clients.

Moreover, various regulations and policies

restrict the ability of shareholders to borrow against or “margin”

low-priced stocks, and declines in the stock price

below certain levels may trigger unexpected margin calls.

Additionally, because brokers’

commissions on low-priced stocks

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

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

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

This factor may also limit the willingness of institutions to purchase

our common stock.

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

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

investors to trade our common stock.

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

From time to time

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

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

See “Management’s

Discussion and Analysis of Financial Condition and Results of Operations”

We may not be

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

Numerous companies

and individuals are engaged in the book development business.

We also compete with a large number of companies that license characters

and properties into film, television, books and merchandise.

Competition in these businesses is largely based on the number and

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

There can be no assurance that our current

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

had relationships.

Our revenues will decrease if we are unable to maintain these relationships or develop new relationships.

We may not be

able to successfully protect our trademarks and proprietary rights.

Intellectual Properties

Hollywood Media has applied for trademark and copyright protection for its major intellectual property titles.

of Hollywood Media and NetCo Partners currently has U.S.

registered trademarks as well as pending trademark applications in the

related to its respective business, and they also have foreign registered trademarks and pending trademark applications in

several foreign jurisdictions.

As Hollywood Media’s properties are developed, Hollywood Media intends to apply for further

trademark and copyright protection in the United States and certain foreign countries.

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

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

Trademark registration in the United States extends for a period

of ten years following the date of registration.

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

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

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

date of registration.

Failure to adequately

protect these intellectual property rights could result in adverse consequences for these businesses due to the risks described

We may become

subject to liability for infringement of third-party intellectual property rights.

There can be no assurance

that third parties will not bring copyright or trademark infringement claims against us, or claim that our use of certain technology

violates a patent.

Even if these claims are not meritorious, they could be costly and could divert management’s attention

from other more productive activities.

If it is determined that we have infringed upon or misappropriated a third party’s

proprietary rights, there can be no assurance that any necessary licenses or rights could be obtained on terms satisfactory to

us, if at all.

The inability to obtain any required license on satisfactory terms could force us to incur expenses to change the

way we operate our businesses.

If our competitors prepare and file applications that claim trademarks owned or registered by us,

we may oppose these applications and have to participate in administrative proceedings to determine priority of right in the trademark,

which could result in substantial costs to us, even if the eventual outcome is favorable to us.

An adverse outcome could require

us to license disputed rights from third parties or to cease using such trademarks.

In addition, inasmuch as we license a portion

of our content from third parties, our exposure to copyright infringement or right of privacy or publicity actions may increase;

because we must rely upon such third parties for information as to the origin and ownership of such licensed content.

obtain representations as to the origins, ownership and right to use such licensed content and generally obtain indemnification

to cover any breach of any such representations;

however, there can be no assurance that such representations will be accurate

or that such indemnification will provide adequate compensation for any breach of such representation.

There can be no assurance

that the outcome of any litigation between such licensors and a third party or between us and a third party will not lead to royalty

obligations for which we are not indemnified or for which such indemnification is insufficient, or that we will be able to obtain

any additional license on commercially reasonable terms if at all.

We are dependent

on developing and maintaining strategic relationships .

The success of our

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

with exhibitors and Tekno Books’

ability to develop and execute book projects with authors.

There can be no assurance such

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

condition and results of operations could be adversely impacted.

operations could be negatively impacted by systems interruptions.

The hardware and software

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

failures, break-ins and similar events.

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

similar disruptive problems.

These system problems could negatively affect us.

General Internet traffic interruptions or delays

could also harm the MovieTickets.com business.

To the extent MovieTickets.com’s services are disrupted, MovieTickets.com

could lose users of its website.

regulation could impact our business.

application of existing laws and regulations to the MovieTickets.com business relating to issues such as user privacy, pricing,

taxation, content, sweepstakes, copyrights, trademarks, advertising, and the characteristics and quality of our products and services

can be unclear.

federal laws could have an impact on the MovieTickets.com business.

The Digital Millennium Copyright Act establishes binding rules

that clarify and strengthen protection for copyrighted works in digital form, including works used via the Internet and other

computer networks.

The Child Online Protection Act is intended to restrict the distribution of certain materials deemed harmful

The Children’s Online Privacy Protection Act of 1998 protects the privacy of children using the Internet, by

requiring, among other things, (1) that in certain specific instances the operator of a website must obtain parental consent before

collecting, using or disclosing personal information from children under the age of 13, (2) the operator of a website to make

certain disclosures and notices on the website or online service regarding the collection, use or disclosure of such personal

information, and (3) the operator of a website or online service to establish and maintain reasonable procedures to protect the

confidentiality, security and integrity of personal information collected from children under the age of 13.

We are dependent

on Mitchell Rubenstein and Laurie S.

Silvers, our founders.

Mitchell Rubenstein,

our Chairman of the Board and Chief Executive Officer, and Laurie S.

Silvers, our Vice Chairman, President and Secretary, have

been primarily responsible for our organization and development.

The loss of the services of either of these individuals would

hurt our business.

If either of these individuals were to leave Hollywood Media unexpectedly, we could face substantial difficulty

in hiring qualified successors and could experience a loss in productivity while any successor obtains the necessary training

and experience.

The employment agreements between Hollywood Media and each of these individuals provide, among other things, that

if we terminate either of these individuals without “cause”

or either of these individuals resign for “good

reason”, the other individual will have the right to resign for “good reason”.

the Tekno Books Chief Executive Partner, Dr.

Greenberg in June 2011 could have an adverse effect on the ability of Tekno Books

to maintain its relationships with authors and publishers.

Tekno Books had been

dependent on Dr.

Martin Greenberg, the former Chief Executive Partner of Tekno Books, for the continued development and maintenance

of strategic business relationships, including many of its relationships with authors and publishers.

Greenberg in June 2011 could have an adverse effect on the ability to develop and maintain these relationships.

We have authorized

but unissued preferred stock, which could affect rights of holders of common stock .

Our articles of incorporation

authorize the issuance of preferred stock with designations, rights and preferences determined from time to time by our board

of directors.

Accordingly, our board of directors is empowered, without shareholder approval, to issue preferred stock with dividends,

liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of

common stock.

In addition, the preferred stock could be issued as a method of discouraging a takeover attempt.

Although we do

not intend to issue any preferred stock at this time, we may do so in the future.

Shares of preferred stock are also subject to

potential issuance under the terms of our shareholders' rights plan described below.

of incorporation, bylaws, shareholders’

rights plan and Florida law may discourage takeover attempts.

Certain provisions

of our articles of incorporation, bylaws and our shareholders’

rights plan may discourage takeover attempts and may make

it more difficult to change or remove management.

Our articles of incorporation authorize the issuance of “blank check”

preferred stock with designations, rights and preferences as may be determined from time to time by our Board of Directors.

bylaws include provisions requiring shareholders to provide specified advance notice to Hollywood Media of director nominations

or proposed business to be transacted at shareholder meetings, in order for a shareholder to make a director nomination or propose

meeting business.

If certain events, such as a takeover bid not approved by our Board, occur, our shareholder’s rights plan

will then entitle certain holders of our common stock to purchase at a specified price, shares of a series of our preferred stock

with special voting, dividend and other rights.

In addition, Florida’s

“control share acquisitions”

statute provides that shares acquired in a “control share acquisition”

excludes transactions approved by our board of directors) will not have voting rights unless the voting rights are approved by

a majority of the corporation’s disinterested shareholders.

A “control share acquisition”

is an acquisition,

in whatever form, of voting power in any of the following ranges:

(a) at least 20% but less than 33-1/3% of all voting power;

(b) at least 33-1/3% but less than a majority of all voting power;

or (c) a majority or more of all voting power.

Florida’s “affiliated

transactions”

statute requires approval by disinterested directors or supermajority approval by disinterested shareholders

of certain specified transactions between a public corporation and holders of more than 10% of the outstanding voting shares of

the corporation (or their affiliates).

Our stock price is volatile .

The trading price

of our common stock has and may continue to fluctuate significantly.

During the 24 months ended December 31, 2012, the trading

price for our common stock on the NASDAQ Global Market ranged from $0.90 to $1.97 per share.

Our stock price may fluctuate in

response to a number of events and factors, such as our quarterly operating results, announcements of new products or services,

announcements of mergers, acquisitions, strategic alliances, or divestitures and other factors, including similar announcements

by other companies that investors may consider to be comparable to us.

In addition, the stock market in general has experienced

extreme volatility that often has been unrelated to the operating performance of the companies.

These broad market and industry

fluctuations may cause the market price of our stock to decrease, regardless of our operating performance.

sales of our common stock in the public market could adversely affect our stock price and our ability to raise funds in new stock

sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could adversely

affect prevailing market prices of our common stock and could impair our ability to raise capital through future offerings of

equity securities.

We may issue additional shares of common stock in connection with future financings, acquisitions or other

transactions, or pursuant to outstanding stock options, warrants and other convertible securities, and we may also issue additional

stock options and stock grants from time to time to our employees and directors.

We are generally unable to estimate or predict

the amount, timing or nature of future issuances or public sales of our common stock.

Sales of substantial amounts of our common

stock in the public market could cause the market price for our common stock to decrease.

In addition, a decline in the price

of our common stock would likely impede our ability to raise capital through the issuance of additional shares of common stock

or other equity securities.

We may require

additional capital to finance our operations and there can be no assurance that additional financing will be available on favorable

We may require additional

financing in the future.

Our long-term financial success depends on our ability to generate sufficient revenue and cash flow to

offset operating expenses.

To the extent we do not generate sufficient revenues and cash flow to offset expenses we will require

further financing to fund our ongoing operations.

We cannot assure you that any additional financing will be available or, if

available, that it will be on favorable terms.

The terms of any financing that we enter into will vary depending on many factors

including, among other things, our then current financial condition, the market price of our common stock, and other characteristics

and terms of our capital structure.

We may seek to raise additional capital through public or private offerings of equity securities

or debt financings.

Our issuance of additional equity securities could cause dilution to holders of our common stock and may adversely

affect the market price of our common stock.

The incurrence of debt would increase our interest expense and other debt service

obligations and could result in the imposition of covenants that restrict our operational and financial flexibility.

II, Item 7 of this Annual Report on Form 10-K–

Management’s Discussion and Analysis of Financial Condition and Results

of Operations.

Changes in securities

laws and regulations may increase our costs.

The Sarbanes-Oxley

Act of 2002 and the SEC rules promulgated thereunder have imposed increased demands upon, and required ongoing changes in some

of our operational systems and processes, corporate governance, and compliance and disclosure processes, and the NASDAQ Stock

Market has implemented changes in its requirements for companies that are NASDAQ-listed.

These developments have resulted in,

and future changes in such rules may result in, increases in our expenses for information systems, auditing and consulting fees,

legal compliance and financial reporting costs.

These developments could also make it more difficult for us to attract and retain

qualified members of our board of directors or executive officers.

Other economic

factors may adversely affect our future results or the market price of our stock (such as recession, war, terrorism).

We operate in a rapidly

changing economic and technological environment that presents numerous risks.

Many of these risks are beyond our control and are

driven by factors that we cannot predict.

Economic recession, war, terrorism, international incidents, labor strikes and disputes,

and other negative economic conditions may cause damage or disruption to our facilities, information systems, vendors, employees,

customers and/or website traffic, which could adversely impact our revenues and results of operations, and stock price.

The outcome of, and potential impact

of matters relating to, the lawsuit filed by Hollywood Media, National Amusements Inc.

and MovieTickets.com against AMC Entertainment

could have a material adverse effect on the value of Hollywood Media’s interest in MovieTickets.com.

As reported in Part

I, Item 3 of this Annual Report on Form 10-K, Hollywood Media, National Amusements Inc.

and MovieTickets.com filed a lawsuit against

AMC Entertainment Inc.

(“AMC”) alleging, among other things, that AMC has breached and continues to breach the MovieTickets.com

Joint Venture Agreement, which obligates AMC to exclusively provide its ticket inventory to MovieTickets.com.

Hollywood Media and

the other plaintiffs are seeking unspecified consequential damages and have reserved the right to seek punitive damages.

Media and the other plaintiffs also are seeking a declaratory judgment that 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 to the MovieTickets.com Joint Venture and its joint venturers, Hollywood Media and National Amusements,

If the lawsuit against

AMC is unsuccessful, it could have a material adverse effect on the value of Hollywood Media’s interest in MovieTickets.com.

Unresolved Staff

At the time of filing

of this Annual Report on Form 10-K, there are no unresolved comments for disclosure under this Item 1B.

and NewStem have limited operating histories and have generated no revenue to date.

and NewStem have a limited operating history and do not have a meaningful historical record of sales and revenues, nor do we or NewStem

have an established business track record.

While we believe that we have the opportunity to be successful, there can be no assurance

that we will be successful in accomplishing our business initiatives, or that we will be able to achieve any significant levels of revenues

or net income.

have identified material weaknesses in our internal control and procedures and internal control over financial reporting.

If not remediated,

our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could

result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which

could have a material adverse effect on our financial condition and the trading price of our common stock.

effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce

reliable financial statements.

We have re-evaluated our internal control over financial reporting and our disclosure controls and procedures

and concluded that they were not effective as of December 31, 2022 and we concluded there was a material weakness in the design of our

internal control over financial reporting.

material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that

there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or

detected on a timely basis.

technological change could cause products to become obsolete, and if NewStem does not enhance its product offerings through research

and development efforts, it may be unable to effectively compete.

future business success will depend upon its ability to maintain and enhance its product portfolio with respect to advances in technological

improvements for certain products that meet customer needs and market conditions in a cost-effective and timely manner.

NewStem may not

be successful in gaining access to new products that successfully compete or are able to anticipate customer needs and preferences, and

customers may not accept one or more of its products.

If NewStem fails to keep pace with evolving technological innovations or fails

to modify its products and services in response to customers’ needs or preferences, then NewStem’s and our business, financial

condition and results of operations could be adversely affected.

technologies underlying NewStem’s products are subject to rapid and profound technological change.

Competition intensifies as technical

advances in each field are made and become more widely known.

We can give no assurance that others will not develop services, products,

or processes with significant advantages over the products, services, and processes that NewStem offers or is seeking to develop.

such occurrence could have a material and adverse effect on NewStem’s and our business, results of operations and financial condition.

plans to enhance and broaden its product offerings in response to changing customer demands and competitive pressure and technologies.

The success of any new product offering or enhancement to an existing product will depend on numerous factors, including the ability

identify and anticipate physician and patient needs;

and introduce new products or product enhancements in a timely manner;

protect intellectual property and avoid infringing upon the intellectual property rights of third parties;

the safety and efficacy of new products;

the necessary regulatory clearances or approvals for new products or product enhancements.

NewStem does not develop and, when necessary, obtain regulatory clearance or approval for new products or product enhancements in time

to meet market demand, or if there is insufficient demand for these products or enhancements, its results of operations will suffer.

NewStem’s research and development efforts may require a substantial investment of time and resources before it is adequately able

to determine the commercial viability of a new product, technology, material or other innovation.

In addition, even if NewStem is able

to successfully develop enhancements or new generations of its products, these enhancements or new generations of products may not produce

sales in excess of the costs of development, and they may be quickly rendered obsolete by changing customer preferences or the introduction

by competitors of products embodying new technologies or features.

ongoing viability as a company depends on NewStem’s ability to successfully develop and commercialize its products.

is principally focused on utilizing proprietary hPSCs and HhPSCs in the development of diagnostic and therapeutic products in oncology.

NewStem must develop diagnostics and therapeutics successfully test them for safety and efficacy in the targeted patient population and

manufacture the finished drugs on a commercial scale to meet regulatory standards and receive regulatory approvals.

The development and

commercialization process is both time-consuming and costly, and involves a high degree of business risk.

The results of pre-clinical

and clinical testing of product candidates are uncertain, and there can be no assurance that NewStem will be able to obtain regulatory

approvals of its product candidates.

If obtained, regulatory approval may take longer or be more expensive than anticipated.

even if regulatory approvals are obtained, NewStem’s products may not perform as we expect and NewStem may not be able to successfully

and profitably produce and market any products.

Delays in any part of the process or our inability to obtain regulatory approval of such

products could adversely affect NewStem’s and, therefore, NovelStem’s future operating results by restricting (or even prohibiting)

the introduction and sale of such products.

value of our investment in NetCo and our ability to receive distributions may be affected by disputes between the Company and

Group, our partner in NetCo.

Company and C.P.

Group each own a 50% interest in NetCo.

The joint venture agreement governing NetCo provides for mutual

decision making among the Company and C.P.

Group generally (subject to exceptions) and arbitration in the event any controversy or disagreement

The Company and C.P.

Group are currently in arbitration as to ongoing scope and the operation of NetCo.

If we are unable

to resolve such dispute in a manner favorable to the Company, our investment in NetCo and our ability to continue to receive

distributions from our interest in NetCo could have an adverse effect on our business, financial condition or operating results.

business is intensely competitive and “hit” driven.

NetCo may not deliver “hit” products

and services, or consumers may prefer a competitors’ products or services over NetCo.

in the publishing and video game industries is intense.

Many new products and services are regularly introduced in each major industry

segment (console, mobile and PC), but only a relatively small number of “hit” titles account for a significant portion of

total revenue in each segment.

NetCo’s competitors range from established interactive entertainment companies and diversified

media companies to emerging start-ups, and we expect new competitors to continue to emerge throughout the world.

competitors develop and market more successful and engaging products or services, offer competitive products or services at lower price

points, or if NetCo does not develop high-quality, well-received and engaging products and services, NetCo and

our revenue, margins, and profitability will decline.

NetCo fails to develop relationships with new creative talent, its business could be adversely affected.

NetCo’s business, in particular the trade publishing and media portions of the business, is highly dependent on maintaining strong

relationships with the authors, illustrators and other creative talent who produce the products and services that are sold to its customers.

Any overall weakening of these relationships, or the failure to develop successful new relationships, could have an adverse impact on

NetCo and the Company’s business and financial performance.

relating to our common stock

our holding company structure creates restrictions on the payment of dividends, our ability to pay dividends is limited.

are a holding company whose primary assets are our ownership of equity interests in NewStem and NetCo.

We conduct no other business

and, as a result, we depend entirely upon NewStem’s and NetCo’s earnings and cash flow.

If we decide in the future

to pay dividends, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends

or other payments from NewStem or NetCo.

NewStem and/or NetCo may be restricted in their ability to pay dividends, make distributions

or otherwise transfer funds to us prior to the satisfaction of other obligations, including the payment of operating expenses or debt

service, appropriation to reserves prescribed by laws and regulations, covering losses in previous years, restrictions on the conversion

of local currency into U.S.

dollars or other hard currency, completion of relevant procedures with governmental authorities or banks

and other regulatory restrictions.

We do not presently have any intention to declare or pay dividends in the future.

You should not purchase

shares of our common stock in anticipation of receiving dividends in future periods.

we do not intend to pay any cash dividends on our common stock, our shareholders will not be able to receive a return on their shares

unless they sell them.

intend to retain any future earnings to finance the development and expansion of our business.

We do not anticipate paying any cash dividends

on our common stock in the foreseeable future.

Unless we pay dividends, our shareholders will not be able to receive a return on their

shares unless they sell them.

Shareholders may never be able to sell shares when desired.

Before you invest in our securities, you should

be aware that there are various risks.

You should consider carefully these risk factors, together with all of the other information included

in this annual report before you decide to purchase our securities.

If any of the following risks and uncertainties develop into actual

events, our business, financial condition or results of operations could be materially adversely affected.

are an emerging growth company and the reduced disclosure requirements applicable to emerging growth companies could make our common

stock less attractive to investors.

are an emerging growth company.

Under the JOBS Act, emerging growth companies can take advantage of certain exemptions from various reporting

requirements that are applicable to other public companies including, without limitation, reduced disclosure obligations regarding executive

compensation in our periodic reports and proxy statements, exemptions from the requirements of holding a non-binding advisory shareholder

vote on executive compensation and golden parachute payments, exemption from the requirement of auditor attestation in the assessment

of our internal control over financial reporting and exemption from any requirement that may be adopted by the Public Company Accounting

Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information

about our audit and the financial statements (auditor discussion and analysis).

As a result of the foregoing, the information that we

provide shareholders may be different than what is available with respect to other public companies.

addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition

period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards.

to elect to use the extended period for compliance and, as a result, our financial statements may not be comparable to companies

that comply with public company effective dates.

requirement under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and compliance with the Sarbanes-Oxley

Act of 2002 (the “Sarbanes-Oxley Act”), including establishing and maintaining acceptable internal controls over financial

reporting, are costly and may increase substantially.

rules and regulations of the SEC require a public company to prepare and file periodic reports under the Exchange Act, which will require

that the Company engage legal, accounting, auditing and other professional services.

The engagement of such services is costly.

Additionally,

the Sarbanes-Oxley Act requires, among other things, that we design, implement and maintain adequate internal controls and procedures

over financial reporting.

The costs of complying with the Sarbanes-Oxley Act and the limited technically qualified personnel we have

may make it difficult for us to design, implement and maintain adequate internal controls over financial reporting.

In the event that

we fail to maintain an effective system of internal controls or discover material weaknesses in our internal controls, we may not be

able to produce reliable financial reports or report fraud, which may harm our overall financial condition and result in loss of investor

confidence and a decline in our share price.

a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act of

2010 and other applicable securities rules and regulations.

Despite recent reforms made possible by the JOBS Act, compliance with these

rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more difficult, time-consuming

or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.”

The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating

are working with our legal, accounting and financial advisors to identify those areas in which changes should be made to our financial

and management control systems to manage our growth and our obligations as a public company.

These areas include corporate governance,

corporate control, disclosure controls and procedures and financial reporting and accounting systems.

We have made, and will continue

to make, changes in these and other areas.

However, we anticipate that the expenses that will be required in order to adequately prepare

for being a public company could be material.

We estimate that the aggregate cost of increased legal services;

accounting and audit functions;

personnel, such as a chief financial officer familiar with the obligations of public company reporting;

consultants to design and implement

internal controls;

and financial printing alone will be a few hundred thousand dollars per year and could be several hundred thousand

dollars per year.

In addition, we may incur additional expenses related to director compensation and/or premiums for directors’

and officers’ liability insurance, the costs of which we cannot estimate at this time.

We may also incur additional expenses associated

with investor relations and similar functions, the cost of which we also cannot estimate at this time.

However, these additional expenses

individually, or in the aggregate, may also be material.

addition, being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including directors’

and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher

costs to obtain the same or similar coverage.

The impact of these events could also make it more difficult for us to attract and retain

qualified persons to serve on our board of directors, our board committees or as executive officers.

increased costs associated with operating as a public company may decrease our net income or increase our net loss and may cause us to

reduce costs in other areas of our business or increase the prices of our products or services to offset the effect of such increased

Additionally, if these requirements divert our management’s attention from other business concerns, they could have a material

adverse effect on our business, financial condition and results of operations.

is a very limited trading market for our common stock and investors are not assured of the opportunity to sell their stock, should they

desire to do so.

common stock is currently quoted on the OTC Pink Market.

However, our stock has traded in very limited quantities in the past.

a significant factor in the limited market is our limited capitalization and liquidity, results of operations and the characterization

of our stock as a “penny stock.” We hope to remedy our financial condition and results of operation in the future.

in turn, may assist us in obtaining listing of our stock on other exchanges.

However, there is no assurance that any of these objectives

will be met or that the market will ever increase to a point where investors could sell their stock at a desirable price, should they

desire to do so.

price of our common stock could be highly volatile.

shares of common stock are quoted on the OTC Pink Market.

It is likely that our common stock will be subject to price volatility, low

volumes of trades and large spreads in bid and ask prices quoted by market makers.

Due to the low volume of shares traded on any trading

day, persons buying or selling in relatively small quantities may easily influence prices of our common stock.

This low volume of trades

could also cause the price of our stock to fluctuate greatly, with large percentage changes in price occurring in any trading day session.

Holders of our common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due

to low volume trading.

If high spreads between the bid and ask prices of our common stock exist at the time of a purchase, the stock

would have to appreciate substantially on a relative percentage basis for an investor to recoup their investment.

Broad market fluctuations

and general economic and political conditions may also adversely affect the market price of our common stock.

No assurance can be given

that an active market in our common stock will be sustained.

If an active market does not continue, holders of our common stock may be

unable to readily sell the shares they hold or may not be able to sell their shares at all.

may be deemed an investment company, which could impose on us burdensome compliance requirements.

Investment Company Act of 1940, as amended (the “Investment Company Act”), requires companies to register as an investment

company if they are engaged primarily in the business of investing, reinvesting, owning, holding, or trading securities.

Generally, companies

may be deemed investment companies under the Investment Company Act if they are viewed as engaging in the business of investing in securities

or they own investment securities having a value exceeding 40% of certain assets.

We are not in the business of investing, reinvesting,

owning, holding or trading securities.

However, if the Securities and Exchange Commission deems us to be an investment company, we may

have imposed upon us additional burdensome requirements, including having to register as an investment company, adopting a specific form

of corporation structure and having to comply with certain reporting, record keeping, voting, proxy, and disclosure requirements.

additional requirements would require us to incur additional costs and have an adverse effect on our results of operations and our ability

to effectively carry out our business plan.

Unresolved Staff Comments.

corporate office is located at 2255 Glades Road, Boca Raton, FL 33431.

We believe that our facilities are adequate for current operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors