What changed in this filing

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Item 9A. Controls and Procedures

2023-03-31 compared with 2013-04-01 · 1487 added, 1322 removed, 27 unchanged (99% of the section changed)

Controls and Procedures.

Evaluation of Disclosure Controls and

An evaluation was performed

under the supervision and with the participation of Hollywood Media’s management, including Hollywood Media’s Chief

Executive Officer (principal executive officer) and Hollywood Media’s Chief Financial Officer and Chief Accounting Officer

(principal financial and accounting officer), on the effectiveness of Hollywood Media’s disclosure controls and procedures

(as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”))

as of the end of the period covered by this Annual Report on Form 10-K.

Based on that evaluation, Hollywood Media’s management,

including Hollywood Media’s Chief Executive Officer (principal executive officer) and Hollywood Media’s Chief Financial

Officer and Chief Accounting Officer (principal financial and accounting officer), have concluded that Hollywood Media’s

disclosure controls and procedures were effective as of December 31, 2012 to ensure that information required to be disclosed

by Hollywood Media in reports Hollywood Media files or submits under the Exchange Act is (i) recorded, processed, summarized

and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and (ii) accumulated

and communicated to Hollywood Media’s management, including Hollywood Media’s Chief Executive Officer (principal executive

officer) and Hollywood Media’s Chief Financial Officer and Chief Accounting Officer (principal financial and accounting officer),

to allow timely decisions regarding required disclosure.

Management’s Report on Internal

Control Over Financial Reporting

Hollywood Media’s

management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f)

and 15d-15(f) under the Exchange Act).

Internal control over financial reporting is a process designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance

with generally accepted accounting principles and includes those policies and procedures that (1) pertain to the maintenance

of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of Hollywood Media’s

assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements

in accordance with generally accepted accounting principles, and that Hollywood Media’s receipts and expenditures are being

made only in accordance with authorizations of Hollywood Media’s management and directors, and (3) provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Hollywood Media’s assets

that could have a material effect on the financial statements.

All internal control systems, no matter how well designed, have

inherent limitations.

Therefore, even those internal control systems determined to be effective can provide only reasonable assurance

with respect to financial statement preparation and presentation.

Hollywood Media’s

management, including Hollywood Media’s Chief Executive Officer (principal executive officer) and Hollywood Media’s

Chief Financial Officer and Chief Accounting Officer (principal financial and accounting officer), conducted an evaluation of the

effectiveness of Hollywood Media’s internal control over financial reporting based on the framework set forth in Internal

Control –

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this

evaluation, Hollywood Media’s management, including Hollywood Media’s Chief Executive Officer (principal executive

officer) and Hollywood Media’s Chief Financial Officer and Chief Accounting Officer (principal financial and accounting officer),

concluded that Hollywood Media’s internal control over financial reporting was effective as of December 31, 2012.

Changes in Internal Control Over Financial

As previously reported

in Hollywood Media’s Annual Report on Form 10-K for the year ended December 31, 2011, as amended, Hollywood Media’s

management assessed the effectiveness of Hollywood Media’s internal control over financial reporting as of December 31, 2011

and concluded the following deficiencies in Hollywood Media’s CinemasOnline and Intellectual Properties businesses constituted

material weaknesses in Hollywood Media’s internal control over financial reporting as of December 31, 2011:

Insufficient internal

controls over the advertising sales process within its U.K.

based CinemasOnline business, including inadequate systems to allow

for processing of advertising sales and deferred advertising sales;

and deferred tax assets and insufficient internal controls

over its disbursements of funds and recording of related assets and expenses in the CinemasOnline business.

Insufficient internal

controls over the book development and book licensing process within its Intellectual Properties Division, including inadequate

systems to allow for processing of book development and book licensing revenue and deferred revenue;

and insufficient internal

controls over its disbursements of funds and recording of related assets and expenses in the Intellectual Properties Division.

On May 1, 2012, Hollywood

Media sold its U.K.

based CinemasOnline business (see Note 5 “Discontinued Operations”

in the Notes to the Consolidated

Financial Statements included in Part II, Item 8, of this Annual Report on Form 10-K).

During the quarter

ended December 31, 2012, Hollywood Media changed its internal control over financial reporting to eliminate the material weaknesses

described above and improve (i) the systems for the processing of book development and book licensing revenue and deferred

revenue in Hollywood Media’s Intellectual Properties Division and (ii) internal controls over disbursements of funds

and recording of related assets and expenses in Hollywood Media’s Intellectual Properties Division.

Except as set forth

above, there have not been any changes in Hollywood Media’s internal control over financial reporting during the year ended

December 31, 2012 that have materially affected, or are reasonably likely to materially affect, Hollywood Media’s internal

control over financial reporting.

Principal Executive Officer and Chief Financial Officer conducted an evaluation of our controls and procedures.

We 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.

material weaknesses identified included insufficient resources to employ proper segregation of duties over the processing of transactions

and financial reporting.

intends to focus on strengthening the Company’s internal controls.

Management expects to make progress towards reducing the risk

that the material weakness could result in a material misstatement of the Company’s annual or interim financial statements.

resources permit, management will continue to systematically build the necessary capabilities and infrastructure to implement corrective

in Internal Control Over Financial Reporting

was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during

the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over

financial reporting.

Other Information.

Directors, Executive Officers

and Corporate Governance.

Directors and Executive Officers

The size of Hollywood

Media’s Board of Directors is currently set at five, and there are currently five incumbent directors serving on the Board.

Hollywood Media’s executive officers are elected by the Board of Directors and serve at the discretion of the Board, subject

to the terms and conditions of each officer’s employment agreement with Hollywood Media (if any).

The following table sets

forth certain information concerning each of the incumbent directors and executive officers of Hollywood Media as of the date of

this Form 10-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Directors, Executive Officers and Corporate Governance.

and certain other information concerning the Company’s officers and directors is set forth below.

There are no familial relationships

among any of our officers or directors.

Except as indicated below, none of our directors is a director in any other reporting companies.

None of our officers or directors has been affiliated with any company that has filed for bankruptcy within the last ten years except

that Jan Loeb has previously been affiliated with Kid Brands, Inc., which filed for bankruptcy in June 2014.

We are not aware of any

proceedings to which any of our officers or directors, or any associate of any such officer or director is a party adverse to us or any

of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

Unless otherwise indicated, there are no arrangements

or understandings between any officer and any other person pursuant to which such person was selected as an officer.

Loeb – President and Executive Chairman – 64 Mr.

Loeb has more than 40 years of business, money management and investment

banking experience.

He has served as Chairman of our Board since July 2018 and on September 29, 2022 was appointed as Executive Chairman.

On January 13, 2023, Mr.

Loeb was appointed President of the Company.

He has been the Managing Member of Leap Tide Capital Management

LLC since 2007 and has served as President and CEO of Acorn Energy, Inc.

since January 2016 and as a Director since August 2015.

He has been a Director of Keweenaw Land Association, Ltd.

From 2005 to 2007, Mr.

Loeb was President of Leap Tide’s predecessor,

formerly known as AmTrust Capital Management Inc.

He served as a Portfolio Manager of Chesapeake Partners from February 2004 to January

2005 and as Managing Director at Jefferies & Company, Inc.

from 2002 to 2004.

From 1994 to 2001, he served as Managing Director

at Dresdner Kleinwort Wasserstein, Inc.

(formerly Wasserstein Perella & Co., Inc.).

Loeb was a Lead Director of American

Pacific Corporation from 2013 to 2014 and a Director from 1997 to 2014.

He also served as an Independent Director of Pernix Therapeutics

Holdings Inc.

(formerly, Golf Trust of America, Inc.) from 2006 to 2011 and as a Director of TAT Technologies, Ltd.

Jenkins – Vice President and Chief Financial Officer – 59 Ms.

Jenkins has over thirty-five years of experience in

public accounting, including audit, consulting and corporate tax.

Jenkins is currently serving as a consultant providing audit

and accounting consultation to publicly-traded and large privately held companies.

From 2010 to 2018 Ms.

Jenkins was an audit partner

with Cherry Bekaert, LLP.

Prior to Cherry Bekaert, from 1995 to 2010, Ms.

Jenkins was a partner in a local accounting firm in Atlanta,

Prior experience included audit and tax positions in public accounting firms.

Rubenstein – Director – 68 Mr.

Rubenstein co-founded and served as Chairman of HMC from its inception to June 2018,

during which period the company returned approximately $37 million to shareholders in the form of dividends and share repurchases,

including a tender offer.

He founded Syfy Channel and numerous other media and digital businesses.

Eric Richman – Director -61

Richman is a life science executive with significant leadership, operational and strategic experience from over 25 years in the

He is currently The CEO of Gain Therapeutics and was a Venture Partner at Brace Pharma Capital and serves on the boards of

LabConnect, F2G (board observer) and previously ADMA Biologics (NASDAQ:

Previously he served as President & CEO of PharmAthene

and prior to that was part of the founding team at MedImmune, responsible for the U.S.

launch of its first commercial product and

an integral part of the global launch teams for other products.

He began his career at HealthCare Ventures, a life-sciences focused

VC firm and formerly was a Director of Lev Pharmaceuticals (sold to Viropharma) and American Bank (sold to Congressional Bancshares)

and served as CEO of Tyrogenex (sold to Betta Pharma).

Seltzer – Director – 62 Mr.

Seltzer is the CEO and Founder of Reliable 1 Laboratories LLC, a distributor of OTC medications

and nutritional supplements to independent pharmacies, long-term care pharmacies, hospitals and government organizations.

a minority owner and Director at Leading Pharma LLC, a generic manufacturer of prescription drugs, having previously served as President

and CEO and later Chairman of Hi-Tech Pharmacal Co., Inc., which was acquired by Akorn, Inc.

for $640 million in 2014.

Wolasky – Director – 64 Mr.

Wolasky has over 35 years’ experience in the wholesale pharmaceutical business,

most recently for the past 15 years in his current role as President of HealthSource Distributors LLC.

He previously served in executive

positions of increasing responsibility for AmerisourceBergen, and its predecessor company, Bergen Brunswig.

Tracy Clifford – Director -54 Ms.

Clifford has over twenty years

of experience in accounting and finance, including mergers and acquisitions of public companies.

Clifford is the CFO of Acorn

and COO of its operating subsidiary Omnimetrix Inc.

and since 2015 she has served as a contract CFO and COO for several

clients, participated on advisory boards and worked on numerous project engagements.

Clifford previously served as CFO, Principal

Accounting Officer, Corporate Controller and Secretary for a publicly traded pharmaceutical company and a publicly-traded REIT from

1999 to 2015.

Clifford’s prior experience included accounting leadership positions at United Healthcare, the North Broward

Hospital District and the audit team of Deloitte & Touche.

Audit Committee Financial Expert

Company’s full board is functioning as our audit committee at the time of this Annual Report.

do not have a compensation committee or persons participating in deliberations concerning executive officer compensation as there was

no executive officer compensation paid other than hourly payments for Chief Financial Officer services during 2022.

do not have a nominating committee.

All directors participate in the nomination and election of directors.

16(a) Beneficial Ownership Reporting Compliance;

Delinquent Section 16(a) Reports

16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires our executive officers and directors, and persons

who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC.

These persons are also required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

Further, we have implemented

measures to assure timely filing of Section 16(a) reports by our executive officers and directors.

Based solely on our review of such

forms or written representations from certain reporting persons, we believe that during 2021 our executive officers and directors complied

with the filing requirements of Section 16(a).

are no arrangements which may at a subsequent date result in a change in control of the Company

Executive Compensation.

and Director Compensation

Summary Compensation Table

Name and Principal Position

President and Executive Chairman

Christine Jenkins

Vice President and Chief Financial Officer

Mitchell Rubenstein

Chairman of the Board and Chief Executive Officer

Vice Chairman of the Board, President and Secretary

Chief Financial Officer and Chief Accounting Officer

The following paragraphs

provide biographies of each of the incumbent directors and executive officers of Hollywood Media and, for each incumbent director

of Hollywood Media, the experiences, qualifications or skills that caused the Nominating Committee and the Board to determine that

the person should serve as our director are set forth in the last sentence of each incumbent director’s biography.

David Seltzer

Jerry Wolasky

Tracy Clifford

(1) Represents

the grant date fair value calculated in accordance with applicable accounting principles

with respect to 100,000 options granted per Executive/Director on January 31, 2022 with an exercise price of $0.29.

The fair value of the options was determined using the Black-Scholes option pricing model

using the following assumptions:

(i) a risk-free interest rate of 1.505% (ii) an expected

term of 4 years (iii) an assumed volatility of 184.74% and (iv) no dividends.

(2) Represents

hourly fees paid to Ms.

Jenkins for the provision of services as Chief Financial Officer

of the Company.

Compensation for 2021 and 2022

to being appointed as our Chief Financial Officer on September 29, 2022 and Vice President on January 13, 2023, beginning in March 2022,

Jenkins served as our outside consultant providing certain financial services.

Jenkins is paid on an hourly basis.

appointed as Executive Chairman on September 29, 2022 and President on January 13, 2023 and does not receive any compensation for his

role as an officer of the Company.

Company pays compensation to its directors pursuant to the NovelStem International Corp.

Equity Incentive Plan (the “Plan”).

Plan provides for the grant to officers, directors, third party contractors and other future key employees of options to purchase shares

of common stock.

Under the Plan, the Company is authorized to issue up to 7,000,000 shares of common stock as equity awards under the

Awards may be made in the form of options, stock appreciation rights (“SARs”), restricted stock or restricted stock

units, or stock bonus awards in respect of the Company’s common stock of the Company.

Grants to any single participant or non-executive

director during any calendar year may not exceed 1,000,000 shares.

purchase price may be paid in cash or at the end of the option term, if the option is “in-the-money”, it is automatically

exercised “net”.

In a net exercise of an option, the Company does not require a payment of the exercise price of the option

from the optionee but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole

shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by

the option exercised.

Each option is exercisable to one share of the Company’s common stock.

awarded under the Plan shall be awarded at an exercise price of not less than the fair market value of a share of our common stock as

of the grant date and shall vest and become exercisable after a period not to exceed seven (7) years.

SARs awarded under the Plan shall

have a strike price per share of common stock of not less than the fair market value of a share of our common stock, provided that, in

the case of a SAR granted in tandem with an option, the strike price shall not be less than the exercise price of the related option.

A SAR granted in tandem with an option shall become exercisable and shall expire according to the same vesting schedule and expiration

provisions as the corresponding option, such date not to exceed seven (7) years of the grant date.

the event of the termination of an employee, third party service provider, officer or Director’s service on the Board of the Company

for any reason other than for cause, all of the Options which are then vested may be exercised within 18 months of such termination,

provided that, in no event shall this extension period continue beyond the expiration of the term of the option(s).

In addition, any

such extension shall be applicable only to the extent that such option or options are vested and exercisable according to the terms of

the Plan and any applicable option agreement.

Any unvested options are immediately terminated on the effective date of the termination.

In the event of termination of an employee, third party service provider, officer or Director’s service for cause, all options

are forfeited and deemed cancelled and no longer exercisable as of the date of termination.

Equity Awards at 2022 Fiscal Year End

following tables set forth all outstanding equity awards made to each of the Executives and Directors that were outstanding at December

Options to Purchase NovelStem International Corp.

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Option Exercise Price ($)

Option Expiration Date

November 12, 2025

November 26, 2026

November 24, 2027

January 31, 2029

Mitchell Rubenstein

is a founder of Hollywood Media and has served as its Chairman of the Board and Chief Executive Officer since its inception in

November 12, 2025

November 26, 2026

November 24, 2027

January 31, 2029

Rubenstein was a founder of the Sci-Fi Channel, a cable television network that was acquired from Mr.

and Laurie Silvers by USA Network in March 1992.

Rubenstein served as President of the Sci-Fi Channel from January 1989 to

March 1992 and served as Co-Vice Chairman of the Sci-Fi Channel from March 1992 to March 1994.

Prior to founding the Sci-Fi Channel,

Rubenstein practiced law for 10 years.

Rubenstein received a J.D.

degree from the University of Virginia School of Law

in 1977 and a Masters in Tax Law (LL.M.) from New York University School of Law in 1979.

He is a past Chair of the Board of Advisors

of Jewish Life at Duke University, which includes the Freeman Center for Jewish Life at Duke and the Rubenstein-Silvers Hillel

Rubenstein is the volunteer Chairman of Morse Geriatric Center in West Palm Beach, Florida a non-profit which is one

of the nation’s leading senior living facilities.

Together with Ms.

Rubenstein was named Co-Business Person

of the Year, City of Boca Raton, Florida in 1992.

Rubenstein is married to Laurie S.

Rubenstein’s

long standing service as the Chairman of the Board and Chief Executive Officer of Hollywood Media, as well as the fact that Mr.

Rubenstein is a founder of Hollywood Media, gives Mr.

Rubenstein extensive knowledge of Hollywood Media and its operations and

makes him a valuable member of our Board.

Silvers is a founder of Hollywood Media and has served as its Vice-Chairman, President and Secretary since its

inception in January 1993.

Silvers was a founder of the Sci-Fi Channel, of which she served as Chief Executive Officer

from January 1989 to March 1992 and Co-Vice Chairman from March 1992 to March 1994.

Prior to founding the Sci-Fi

Silvers practiced law for 10 years.

Silvers received a J.D.

degree from University of Miami School of Law in

Silvers serves on the Board of Trustees of the University of Miami (and is a member of its Executive Committee and

Chair of both its Academic Affairs Committee and Conflict of Interest Committee), the Board of Directors of the Economic

Council of Palm Beach County, Florida (of which she is a past Chair), is a Vice-Chair of the Board of Trustees of the Kravis

Center of the Performing Arts in West Palm Beach, Florida, is a Vice Chair (and incoming Chair) of the Board of Directors of

the Community Television Foundation of South Florida (WPBT Channel 2, the PBS Station in Miami, Florida), and is a member of

the Board of the Jewish Federation of Palm Beach County, Florida.

She is also a mentor for at-risk teenage girls with

the Women of Tomorrow organization, and a member of its board, and is the 2013 Empowerment Mentor Honoree of Women of

Silvers’

long standing service as the Vice-Chairman, President and Secretary of Hollywood Media, as

well as the fact that Ms.

Silvers is a founder of Hollywood Media, gives Ms.

Silvers extensive knowledge of Hollywood Media

and its operations and makes her a valuable member of our Board.

has served as a director of Hollywood Media since July 1993.

From 1979 until his retirement in 1991, Mr.

Hoffman served as President

and Chief Executive Officer of Waldenbooks, Inc., then a leading national retailer of books, magazines and related items.

1968 to 1978, he served as President and Chief Executive Officer of Ingram Book Company, a national book wholesaler.

serves as the Chairman of Hollywood Media’s Compensation Committee, and also serves on Hollywood Media’s Audit Committee,

Stock Option Committee, and Nominating Committee.

Hoffman’s long standing service as a director of Hollywood

Media, as well as the fact that Mr.

Hoffman has extensive experience serving as chief executive officer of a national book retailer,

makes him a valuable member of our Board in light of our Tekno Books division.

has served as a director of Hollywood Media since December 2007.

Epstein, an attorney, founded the Epstein and Frisch

law firm in Indianapolis, Indiana in 1972, which became an association of lawyers practicing as Epstein, Cohen, Donahoe & Mendes

Epstein specializes in a variety of areas of law, including media law and mergers and acquisitions.

Prior to beginning

his private law practice, Mr.

Epstein worked in the legal department of Melvin Simon & Associates.

He received a J.D.

from Indiana University School of Law in 1970 and a B.A.

degree from Franklin College of Indiana in 1967.

Epstein currently

serves as a board member of the Community Music School in Sarasota, Florida, and has served as a local board member of the United

States Selective Service System for over 20 years.

Epstein serves on Hollywood Media’s Audit Committee, Compensation

Committee and Nominating Committee.

Epstein’s legal experience, including his experience in media law and

mergers and acquisitions, makes him a valuable member of our Board.

has served as a director of Hollywood Media since December 2009.

Since March 2005, Mr.

Gans has served as Managing Member of Gans

Family Investments LLLP, an investment firm focused on the technology, media and telecommunications industries.

Gans also served on the Board of Directors of City National Bancshares, the holding company of City National Bank of Florida, from

January 2000 until November 2008.

Gans received a B.A.

in Business and a Masters in Accounting from The University

of Texas at Austin in 1994.

Gans serves on Hollywood Media’s Audit Committee and Stock Option Committee.

experience as a managing member of an investment firm that focuses on the technology, media and telecommunications

industries, as well as Mr.

experience as a director of City National Bancshares, makes him a valuable member of our

Effective as of June 15, 2011, Hollywood Media appointed Tammy Hedge, a certified public accountant, as Hollywood Media’s

Chief Financial Officer and Chief Accounting Officer.

Hedge is responsible for all corporate finance, treasury and accounting

functions for Hollywood Media and its subsidiaries.

Since September 2006, Ms.

Hedge has been the Chief Financial Officer of a privately

held cable TV operator.

From July 2004 to July 2006, Ms.

Hedge was Vice President, Chief Accounting Officer and Controller of Ion

Media Networks Inc.

(formerly called Pax TV), which owns a broadcast television station group and the i network, and was publicly

traded during Ms.

Hedge’s employment.

From August 1999 to June 2004, Ms.

Hedge was the Financial Controller of Dycom Industries,

Inc., a company listed on the New York Stock Exchange that provides specialty contracting services primarily for cable TV and phone

In these positions, Ms.

Hedge was responsible for certain corporate finance, treasury and accounting functions.

Hedge received a Bachelor in Science degree with dual majors in Accounting and Computer Science from East Tennessee State University

Audit Committee

The Audit Committee

of Hollywood Media’s Board of Directors has been established in accordance with section 3(a)(58)(A) of the Securities Exchange

Act of 1934, as amended.

The current members of the Audit Committee are Harry T.

Hoffman, Robert D.

Epstein and Stephen Gans.

Board has determined that each of the current members of the Audit Committee meet the audit committee independence standards under

the listing rules of the Nasdaq Stock Market.

The Board has further determined that the Audit Committee meets the Nasdaq

listing requirement that at least one member of the Audit Committee has such experience or background which results in the individual’s

financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer

with financial oversight responsibilities.

During 2012, the Audit Committee held six meetings.

We currently do not

have a designated “Audit Committee Financial Expert”

(as defined in Item 407 of SEC Regulation S-K) on our audit

Although we had discussions with several potential candidates, we did not ultimately reach mutual interest in proceeding

to nominate any candidate for election to the Board.

We do not currently have any candidates under consideration, but the Board

would consider candidates that our Nominating Committee deems qualified and recommends for nomination.

Code of Ethics

Hollywood Media has

adopted a Code of Professional Conduct that applies to all of its officers, directors and employees.

This Code of Professional

Conduct is available for viewing on our internet website at http://www.hollywoodmedia.com/corporate_governance.htm under the caption

“Code of Professional Conduct.”

Hollywood Media’s internet website and any other website mentioned in this Annual

Report on Form 10-K, and the information contained or incorporated therein, are not intended to be incorporated into this Annual

Report on Form 10-K.

Section 16(a) Beneficial Ownership Reporting

Section 16(a) of the

Securities Exchange Act of 1934 requires Hollywood Media’s directors, executive officers, and persons who own more than 10%

of Hollywood Media’s outstanding common stock, to file with the SEC initial reports of ownership and reports of changes in

ownership of common stock.

Such persons are required by SEC regulation to furnish Hollywood Media with copies of all

such reports they file.

To Hollywood Media’s

knowledge, based solely on a review of the copies of such reports furnished to Hollywood Media or written representations that

no other reports were required, all Section 16(a) filing requirements applicable to its executive officers, directors and greater-than-10%

beneficial owners for the year ended December 31, 2012 have been complied with on a timely basis.

Executive Compensation.

Summary Compensation Table

The following table summarizes the total

compensation paid to or earned by each of Hollywood Media’s named executive officers for each of the two fiscal years ended

December 31, 2012 and 2011, respectively:

Principal Position

November 12, 2025

November 26, 2026

November 24, 2027

January 31, 2029

David Seltzer

November 12, 2025

November 26, 2026

November 24, 2027

January 31, 2029

Jerry Wolasky

November 12, 2025

November 26, 2026

November 24, 2027

January 31, 2029

Tracy Clifford

November 12, 2025

November 26, 2026

November 24, 2027

January 31, 2029

Christine Jenkins

Warrants to Purchase NovelStem International Corp.

Number of Securities Underlying Unexercised Warrants (#) Exercisable

Number of Securities Underlying Unexercised Warrants (#) Unexercisable

Warrant Exercise Price ($)

Expiration Date

June 28, 2023

Mitchell Rubenstein

June 28, 2023

David Seltzer

Jerry Wolasky

Tracy Clifford

Christine Jenkins

and Warrant Exercises

Non-qualified

Deferred Compensation

Company has no deferred compensation plan in place during the years ended December 31, 2022 and 2021.

and Benefits Upon Termination or Change in Control

are no agreements in place with any Executive or Director that would provide for any amounts due under any termination scenario at December

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

following table sets forth certain information with respect to the beneficial ownership of our common stock, as of January 25, 2023,

for each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock, each of our directors

and all directors as a group.

The Company has no executive officers.

Except as indicated in footnotes to this table, we believe that

the shareholders named in this table will have sole voting and investment power with respect to all shares of common stock shown to be

beneficially owned by them, based on information provided to us by such shareholders.

Ownership of Certain Beneficial Owners and Management

and Address of beneficial owner (6)

and nature of beneficial ownership

of total common equity (1)

directors and officers as a group (seven persons)

Applicable percentage ownership is based on 46,881,475 shares of common stock outstanding as of January 25, 2023, together with securities

exercisable or convertible into shares of common stock within 60 days of January 25, 2023.

Beneficial ownership is determined in accordance

with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.

Shares of common stock that a person has the right to acquire beneficial ownership of upon the exercise or conversion of options, convertible

stock, warrants or other securities that are currently exercisable or convertible or that will become exercisable or convertible within

60 days of January 25, 2023, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the

number of shares beneficially owned and percentage of ownership of such person, but are not treated as outstanding for the purpose of

computing the percentage ownership of any other person.

Includes 1,108,108 held in an IRA and 874,528 held as Trustee for the Steinberg Family Trust.

Includes warrants to purchase 2.25 million

shares of common stock at an exercise price of $0.13 per share and options to purchase 1.10 million shares of common stock at an exercise

price of $0.10 per share.

Includes options to purchase 150,000 shares of common stock at an exercise price of $0.10 per share.

Includes options and warrants to purchase 1,850,000 shares of common stock at an exercise price of $0.10 per share.

The address of each person is c/o NovelStem International Corp.

2255 Glades Road, Suite 221A, Boca Raton, FL 33431.

authorized for issuance under equity compensation plans.

Compensation Plan Information

Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

Certain Relationships and Related Transactions, and Director Independence.

Loeb, our President and Executive Chairman of the Board, is also the Chairman of the Board of NewStem.

November 15, 2021, in connection with previous, the Company issued 1,729,729 shares of common stock to directors as a result of certain

contingent assets not being realized, as required by the governing financing documents.

A summary of the shares issued follows:

Mitchell Rubenstein

Jerry Wolasky

David Seltzer

April 12, 2021, the Company entered into a promissory note (the “Note”) with Stephen Gans for $100,000.

The Note accrued

interest at 8% per annum and matured on April 12, 2022.

The proceeds of this Note were used to pay operating expenses of the Company

including directors and officer insurance premiums.

Interest expense accrued related this this Note was $5,752 for the year ended December

The Note and all accrued interest were paid in full on February 16, 2022.

In May 2022, the Company entered into a

finance agreement with Jan Loeb and Jerry Wolasky, shareholders and Board members, which was amended in July 2022, to borrow up to an

aggregate of $600,000 for working capital needs.

This agreement provides for funding through January 31, 2024, provides for interest at

a rate of 8% per annum through November 11, 2022, at which time the interest rate increased to 10% per annum for subsequent advances .

The agreement matures the earlier of January 31, 2024 or 20 months from the date of the first funded amount

unless the lenders agree to extend the due date at that time.

As of the date of this Annual Report, the Company has received advances

of $342,000 under the aforementioned agreement.

as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member

thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since January 1, 2019, in which the

amount involved in the transaction exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for

the last two completed fiscal years.

Approval or Ratification of Transactions with Related Persons

Board conducts an appropriate review of and oversees all related party transactions on a continuing basis and reviews potential conflict

of interest situations where appropriate.

The Board has adopted formal standards to apply when it reviews, approves or ratifies any related

party transaction.

In addition, the Board applies the following standards to such reviews:

(i) all related party transactions must be

fair and reasonable and on terms comparable to those reasonably expected to be agreed to with independent third parties for the same

goods and/or services at the time they are authorized by the Board and (ii) all related party transactions should be authorized, approved

or ratified by the affirmative vote of a majority of the directors who have no interest, either directly or indirectly, in any such related

party transaction.

Independence.

have determined that, under the criteria established by NASDAQ and by our board of directors, Tracy Clifford, Eric Richman, Mitchell

Rubenstein and David Seltzer are independent.

Principal Accountant Fees and Services.

following table summarizes the fees accrued and paid by NovelStem for professional services rendered by Cherry Bekaert LLP for the

years ended December 31, 2022 and 2021.

All other fees

Policies and Procedures

Audit Committee’s current policy is to pre-approve all audit and non-audit services that are to be performed and fees to be charged

by our independent auditor to assure that the provision of these services does not impair the independence of the auditor.

Committee pre-approved all audit and non-audit services rendered by our principal accountant in 2022 and 2021.

Exhibit and Financial Statement Schedules.

following financial statements are filed as part of this registration statement:

INTERNATIONAL CORP.

Ended December 31, 2022 and 2021

to Audited Financial Statements

Financial Statements

of Independent Registered Public Accounting Firm (PCAOB ID 677 )

of Operations

of Changes in Shareholders’ Equity

of Cash Flows

to Financial Statements

of Independent Registered Public Accounting Firm

the Board of Directors and Stockholders

International Corp.

Raton, Florida

on the Financial Statements

have audited the accompanying balance sheets of NovelStem International Corp.

(the “Company”) as of December 31, 2022 and

2021, and the related statements of operations, shareholders’ equity, and cash flows for each of the years in the two-year period

ended December 31, 2022, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the

results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with

accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

/s/ Cherry Bekaert LLP

We have served as the Company’s auditor

Fort Lauderdale, Florida

March 31, 2023

INTERNATIONAL CORP.

As of December 31,

Current assets:

Accounts receivable, administrative fees

Prepaid expenses

Other current assets

Total current assets

Non-current assets

Property and equipment, net

Investment in Netco

Investment in NewStem

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued expenses

Other liabilities

Total current liabilities

Non-current liabilities

Convertible financial instrument

Long-term note payable, including accrued interest

Total liabilities

Commitments and contingencies (see Note 7)

Shareholders’ equity:

Common stock, $ .01 par value, 100,000,000 shares authorized, 50,316,672 shares issued at December 31, 2022 and 2021 and 46,881,475 shares outstanding at December 31, 2022 and 2021

Additional paid-in capital

Accumulated deficit

( 288,940,510 )

( 288,174,780 )

Chief Executive Officer

Treasury stock, at cost, 3,435,197 shares at December 31, 2022 and 2021

Total shareholders’ equity

Total liabilities and shareholders’ equity

accompanying notes are an integral part of these financial statements.

INTERNATIONAL CORP.

OF OPERATIONS

Administrative fee income

Operating expenses:

Research and development expenses

Less – grants and participations received

Research and development expenses, net

General and administrative expenses

Contra expenses - legal fees

Total operating expenses

Loss from operations

Financial (income) expenses, net

Interest expense

Loss before income taxes

Provision for income tax

Net loss before equity in net loss of equity method investees

Equity in net loss of equity method investees

Gain on dilution of equity method investment

$ ( 765,730 )

$ ( 1,345,628 )

Basic and diluted net loss per share:

Net loss per share - basic and diluted

Weighted average number of shares outstanding – basic

Weighted average number of shares outstanding – diluted

accompanying notes are an integral part of these financial statements.

INTERNATIONAL CORP.

OF SHAREHOLDERS’ EQUITY

Shareholders’

Balance December 31, 2020

$ 290,078,899

2 unchanged sentences

( 1,345,628 )

Tammy Hedge (12)

Chief Financial Officer

Scott Gomez (12)

Chief Accounting Officer

( 1,345,628 )

Stock-based compensation

Balance, December 31, 2021

( 288,174,780 )

Represents a $225,000 bonus paid to Mr.

Rubenstein and a $200,000 bonus paid to Ms.

Silvers associated with the extensive successful negotiation with Key Brand which resulted in the agreement for Key Brand to accelerate the first $7 million earnout payment to Hollywood Media to October 1, 2012, irrespective of whether or not Theatre Direct reached the $125 million revenue benchmark required for payment;

and the sale of CinemasOnline.

(a) a partial payment of an automobile allowance of $7,800 payable in accordance with the terms of the executive’s employment

agreement, (b) $2,548 in medical, dental and disability insurance premiums, provided in accordance with the terms of the executive’s

employment agreement, (c) $405,300 which is equal to 5.79% of the First $7 Million Earnout received on October 1, 2012 and (d)

$24,546 which is equal to 4.76% of all payments of principal and interest received by Hollywood Media on account of the

promissory note issued to Hollywood Media by Key Brand in connection with the Broadway Sale, payable

in accordance with the terms of the executive’s employment agreement.

Following such payments, Hollywood Media has

no further obligation to Mr.

Rubenstein in connection with the Broadway Sale.

Represents (a) a partial payment of an automobile allowance of $7,800 payable in accordance with the terms of the executive’s employment agreement, (b) $3,644 in medical, dental and disability insurance premiums, provided in accordance with the terms of the executive’s employment agreement, (c) $52,444 which is equal to 5% of the distributions Hollywood Media received from its interest in MovieTickets.com, Inc., payable in accordance with the terms of the executive’s employment agreement, and (d) $51,519 which is equal to 4.76% of all payments of principal and interest received by Hollywood Media on account of the promissory note issued to Hollywood Media in connection with the Broadway Sale, payable in accordance with the terms of the executive’s employment agreement.

Represents a bonus in recognition of Hollywood Media’s overall good financial performance during the applicable year, which includes (a) a $75,000 bonus paid to each of Mr.

Rubenstein and Ms.

Silvers associated with the announcement of Hollywood Media’s tender offer for Hollywood Media’s common stock resulting from the Broadway Sale, and (b) a $375,000 bonus paid to each of Mr.

Rubenstein and Ms.

Silvers associated with the smooth handling of the downsizing of Hollywood Media after the Broadway Sale and, for Mr.

Rubenstein’s bonus, Mr.

Rubenstein’s becoming the Chief Executive Partner of Tekno Books.

Represents (a)

an automobile allowance of $7,800 payable in accordance with the terms of the executive’s employment agreement, (b) $42,524

in medical, dental and disability insurance premiums, provided in accordance with the terms of the executive’s employment

agreement, (c) $165,200 which is equal to 2.36% of the First $7 Million Earnout received on October 1, 2012 and (d) $10,004 which

is equal to 1.94% of all payments of principal and interest received by Hollywood Media on account of the promissory note

issued to Hollywood Media by Key Brand in connection with the Broadway Sale, payable in accordance with

the terms of the executive’s employment agreement.

Following such payments, Hollywood Media has no further obligation

Silvers in connection with the Broadway Sale.

Represents (a) an automobile allowance of $7,800 payable in accordance with the terms of the executive’s employment agreement, (b) $34,653 in medical, dental and disability insurance premiums, provided in accordance with the terms of the executive’s employment agreement, (c) $52,444 which is equal to 5% of the distributions Hollywood Media received from its interest in MovieTickets.com, Inc., payable in accordance with the terms of the executive’s employment agreement, and (d) $20,997 which is equal to 1.94% of all payments of principal and interest received by Hollywood Media on account of the promissory note issued to Hollywood Media in connection with the Broadway Sale, payable in accordance with the terms of the executive’s employment agreement.

Represents a bonus in recognition of providing support to the Company's CEO and President in connection with the negotiations to successfully resolve the dispute with the Estate of Martin Greenberg regarding Tekno Books, and the transition of auditors from Kaufman Rossin to Marcum LLP.

Represents a bonus in recognition of the successful transition of the leadership of the Company’s Accounting Department.

Represents medical, dental and disability

insurance premiums, provided in connection with the executive’s employment with Hollywood Media.

Bonus includes a cash bonus of $25,000 payable in accordance with the terms of the executive’s employment agreement.

Represents medical, dental and disability insurance premiums, provided in accordance with the terms of the executive’s employment agreement.

As a result of the downsizing of Hollywood Media following the Broadway Sale, Hollywood Media and Scott Gomez, the former Chief Accounting Officer of Hollywood Media, mutually agreed not to renew the employment agreement of Mr.

Gomez’s employment with Hollywood Media terminated effective June 15, 2011.

Effective as of June 15, 2011, Hollywood Media appointed Tammy Hedge, age 50, a certified public accountant, as Hollywood Media’s Chief Financial Officer and Chief Accounting Officer.

Employment Agreements with Named Executive

Employment Agreements

with Chief Executive Officer and President .

In 1993, Hollywood Media entered into employment agreements with each of Mitchell

Rubenstein, to serve as Chairman and Chief Executive Officer, and Laurie S.

Silvers, to serve as Vice Chairman and President.

current terms of these agreements, as amended, are described below.

These agreements were amended and restated in December 2008,

and were amended further in connection with the sale of Hollywood Media’s Broadway Ticketing Division that was announced

on December 22, 2009 and completed on December 15, 2010 (which amendments are described further below).

In deciding to renew

the contracts of Mr.

Rubenstein and Ms.

Silvers in December 2008, the Compensation Committee of Hollywood Media’s Board of

Directors (the “Compensation Committee”) considered the compensation study received from Pearl Meyer & Partners,

LLC in November 2008 and, among other things, the qualifications and performance of Mr.

Rubenstein and Ms.

Silvers, the value of

their institutional knowledge, the Company’s revenues, results, transactions and operations, the need for experienced management

in a recession economy as well as management’s positioning of the Company in advance of the recession with significant cash

on hand and, most importantly, given the credit crisis, no long-term debt, the exercise of conservative inventory management in

the Company’s Broadway Ticketing business, the dividends received from MovieTickets.com in the second quarter of 2008 and

expected in the first quarter of 2009 (which was subsequently received), significant cost-cutting implemented by management in

2008, and the Company’s return of cash to shareholders through the Company’s stock repurchase plan.

Pursuant to the amended

and restated employment agreements dated December 2008, the terms of both agreements were extended through December 31, 2010.

terms of each of the employment agreements are automatically extended for successive one-year terms unless Hollywood Media or the

executive officer gives written notice to the other at least 90 days prior to the then-scheduled expiration date.

of the employment agreements provides for an annual salary (subject to automatic cost-of-living increases based on changes in the

consumer price index), additional cash bonuses as determined by the Compensation Committee or the Board of Directors from time

to time at their discretion, and an automobile allowance of $650 per month.

Under the amended and restated employment

agreements dated December 2008, the annual salary rates were $487,378 for Mr.

Rubenstein and $426,456 for Ms.

December 2009 Amendments .

connection with the sale of Hollywood Media’s Broadway Ticketing Division (the “Broadway Sale”) that was announced

on December 22, 2009 and completed on December 15, 2010 (which reduced the revenues of Hollywood Media), the Compensation Committee

and the independent directors of Hollywood Media’s board of directors desired to reduce Hollywood Media’s fixed executive

compensation while at the same time (a) retaining the services of Mr.

Rubenstein and Ms.

Silvers, each of whom Hollywood Media’s

independent directors felt were key to Hollywood Media’s future success, and (b) providing an ongoing incentive to Mr.

Silvers that aligned their interests with the shareholders of Hollywood Media.

As described below, the Compensation

Committee (working closely with the independent directors of Hollywood Media’s board of directors) negotiated amendments

to the employment agreements of Mr.

Rubenstein and Ms.

On December 23, 2009,

(i) Hollywood Media and Mitchell Rubenstein entered into an amendment to the amended and restated employment agreement of Mr.

and (ii) Hollywood Media and Laurie S.

Silvers entered into an amendment to the amended and restated employment agreement of Ms.

Pursuant to these amendments, the executives continued to be employed by Hollywood Media for the same salary and benefits

as set forth in the employment agreements dated December 2008 until the 90th day following the consummation of the Broadway Sale

(which 90th day was March 15, 2011).

After March 15, 2011, the executives will be employed by Hollywood Media until such employment

is terminated by either Hollywood Media or the executives (such period, the “Extension Term”).

During the Extension

Rubenstein and Ms.

Silvers no longer receive fixed base salaries from Hollywood Media (other than a nominal payment of

$1 per year), and each instead receives compensation for his or her services to Hollywood Media in amounts equal to five percent

(5%) of the sum of (i) any distributions and other proceeds Hollywood Media received or receives after December 23, 2009 (the effective

date of the amendments) in respect of its ownership interest in MovieTickets.com, Inc.

and (ii) certain other amounts that may

be received by Hollywood Media from MovieTickets.com, Inc.

(collectively, the “5% Distribution”).

Pursuant to the 5%

Distribution, upon a sale of Hollywood Media’s interest in MovieTickets.com, Inc., Mr.

Rubenstein and Ms.

Silvers would each

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

On August 28, 2012,

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

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.

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.

Rubenstein and Ms.

Pursuant to the R&S

Agreement, in exchange for R&S Investments paying Hollywood Media $2,950,000 in cash (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.

Pursuant to the Rubenstein

Silvers Letter Agreement, Mr.

Rubenstein agreed that 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.

In addition, pursuant

to the Rubenstein Silvers Letter Agreement, Ms.

Silvers 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

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

If the employment of

either executive is terminated (i) by reason of the death of the executive, (ii) by Hollywood Media during the Extension Term for

any reason other than for “cause,”

or (iii) by the executive for “good reason,”

the right of such executive

to payments of the 5% Distribution will fully vest and the 5% Distribution will continue to be paid to the executive and the executive’s

In the event that during

the Extension Term Hollywood Media enters into any additional businesses other than its existing businesses, then Hollywood Media

will consider in good faith increasing each of the executive’s compensation during the Extension Term to reflect the additional

service to be provided by the executive to Hollywood Media in connection with such additional businesses.

The consummation of

the Broadway Sale constituted a “change of control”

under the amended employment agreements (and would have constituted

a “change of control”

under the employment agreements dated December 2008).

Rubenstein and Ms.

Silvers agreed pursuant

to the amended employment agreements that in connection with the Broadway Sale, $812,501 of the amount Mr.

Rubenstein was entitled

to receive and $332,189 of the amount Ms.

Silvers was entitled to receive upon a change of control was deferred and will be paid

in accordance with the amended employment agreements.

As a result, Mr.

Rubenstein and Ms.

Silvers each was entitled to receive

a reduced change of control payment equal to $1.5 million upon the consummation of the Broadway Sale.

Regardless of whether

Rubenstein or Ms.

Silvers continued to provide services to Hollywood Media after the first anniversary of the consummation

of the Broadway Sale, one-half of the deferred change in control payments were to be paid to Mr.

Rubenstein and/or Ms.

as applicable, upon the receipt by Hollywood Media of payments pursuant to the Credit Agreement entered into in connection with

the Broadway Sale, on a pro rata basis, and one-half of such payments was to 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 pursuant to the Broadway Sale,

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.

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”), which interest Hollywood Media had

acquired on October 7, 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 Credit Agreement).

On October 1, 2012,

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

As a result, pursuant to existing

employment agreements, on October 5, 2012 Mr.

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

Silvers received $165,200

of such earnout payment.

Following such payments, Hollywood Media has no further obligation to Mr.

Rubenstein or Ms.

connection with the Broadway Sale.

If Hollywood Media

fails to pay any amount that becomes due to either executive under the amended employment agreements by the latest date on which

such amount is permitted under the amended employment agreements to be paid, interest will be charged with respect to the past

due amount at the rate of 1.5% per month, compounded monthly, from the latest date on which such amount was permitted under the

amended employment agreements to be paid, and such interest shall be paid by Hollywood Media to such executive at or before the

time that the amount past due is paid.

From time to time the

Compensation Committee may award discretionary bonuses to Mr.

Rubenstein and Ms.

Silvers based on their service or performance

to the Company.

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

Silvers received a bonus of $200,000 in the quarter ended June

Bonuses are included in “Payroll and benefits”

in Hollywood Media’s consolidated statements of operations

included in Part II, Item 8 of this Annual Report on Form 10-K.

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

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

Employment of Chief

Financial Officer and Chief Accounting Officer .

Effective as of June 15, 2011, Hollywood Media appointed Tammy Hedge, age 52,

a certified public accountant, as Hollywood Media’s Chief Financial Officer and Chief Accounting Officer.

Hedge is responsible for all corporate finance, treasury and accounting functions for Hollywood Media and its subsidiaries.

September 2006, Ms.

Hedge has been the Chief Financial Officer of a privately held cable TV operator.

From July 2004

to July 2006, Ms.

Hedge was Vice President, Chief Accounting Officer and Controller of Ion Media Networks Inc.

(formerly called

Pax TV), which owns a broadcast television station group and the i network, and was publicly traded during Ms.

Hedge’s employment.

August 1999 to June 2004, Ms.

Hedge was the Financial Controller of Dycom Industries, Inc., a company listed on the New York Stock

Exchange that provides specialty contracting services primarily for cable TV and phone companies.

In these positions,

Hedge was responsible for certain corporate finance, treasury and accounting functions.

Hedge received a Bachelor

in Science degree with dual majors in Accounting and Computer Science from East Tennessee State University in 1982.

Hedge does not

have a written employment agreement with Hollywood Media.

Hedge receives a base salary of $125,000 annually and

may be eligible for an incentive bonus at the discretion of the Compensation Committee of Hollywood Media’s Board of Directors.

Hedge also is eligible for four weeks paid vacation annually and will be reimbursed for certain out-of-pocket business expenses

including certain auto expenses.

Due to the downsizing of Hollywood Media, Hollywood Media currently anticipates that

Hedge will devote, on average, approximately 50% of her time on Hollywood Media business.

The Compensation Committee

has the authority to grant cash bonus awards and may approve compensation plans or agreements to grant bonuses based on specified

Discretionary bonus awards vary depending on the Compensation Committee’s review and consideration of various factors

including the executive officer’s contribution to Hollywood Media’s achievement of its goals.

2012, the Compensation Committee awarded (i) Mr.

Rubenstein a cash bonus in the amount of $225,000 associated with the successful

negotiations with Key Brand which resulted in the agreement for Key Brand to accelerate the first $7 million earnout payment

to Hollywood Media to October 1, 2012, irrespective of whether or not Theater Direct reached the $125 million revenue benchmark

and the sale of CinemasOnline , (ii) Ms.

Silvers a cash bonus in the amount of $200,000

associated with the successful negotiations with Key Brand which resulted in the agreement for Key Brand to accelerate the

first $7 million earnout payment to Hollywood Media to October 1, 2012, irrespective of whether or not Theater Direct reached the

$125 million revenue benchmark for payment;

and the sale of CinemasOnline, and (iii) Ms.

bonus of $90,000 for providing support to the Company's CEO and President in connection with the negotiations to successfully

resolve the dispute with the Estate of Martin Greenberg regarding Tekno Books, and the transition of auditors from Kaufman Rossin

Stock Option Grants and Equity-Based

During the fiscal

year ended December 31, 2012, no stock options or other equity-based compensation awards were granted to Mr.

Rubenstein, Ms.

Hedge or any other employee of the Company..

Other Benefits

Although perquisites

are not a primary aspect of Hollywood Media’s executive compensation, Hollywood Media provided its named executive officers

with the following perquisites during 2011 and 2012:

Automobile Allowance.

employment agreement between Hollywood Media and Mitchell Rubenstein provides that Mr.

Rubenstein is entitled to an automobile

allowance of $650 per month.

The employment agreement between Hollywood Media and Laurie S.

Silvers provides that Ms.

Silvers is entitled to an automobile allowance of $650 per month.

Insurance Coverage .

Media provides the named executive officers and their dependants with medical, dental, disability and life insurance coverage at

the sole expense of Hollywood Media.

On September 27, 2010,

upon recommendation of Mitchell Rubenstein, CEO and Chairman of Hollywood Media, as part of the Company’s cost-cutting plan,

the Board of Directors of Hollywood Media approved of the termination of Hollywood Media’s 401(k) plan effective November

Hollywood Media maintained a 401(k) Plan (the “Plan”) covering all employees who met certain eligibility

requirements.

The Plan provided that each participant could contribute up to 15% of his or her pre-tax gross compensation (not

to exceed a statutorily prescribed annual limit).

All amounts contributed by employee participants in conformity with Plan requirements

and earnings on such contributions were fully vested at all times.

The match in stock was 50% of the first 8% of the employees’

compensation contributions, for those participants employed in excess of 1,000 hours during the year and employed on the last day

The match for the year ended December 31, 2010 was $148,404 and was paid in cash to the Plan during the fourth quarter

of the year ended December 31, 2010.

The match for the year ended December 31, 2009 was 101,189 shares of Hollywood Media common

stock, valued at $141,664 (based on a share price of $1.40 per share), and was paid in the first quarter of the year ended December

The Plan had investments in Hollywood Media common stock of 303,270 shares valued at a share price of $1.64 or $497,363

and 439,874 shares valued at a share price of $1.40 or $615,824, as of December 31, 2010 and 2009, respectively.

The Plan assets

were fully transferred or distributed during the year ended December 31, 2011 and there were no plan assets remaining as of December

Outstanding Equity Awards at 2012 Fiscal Year-End

As of December 31,

2012, there were no unexercised options, unvested stock awards or equity incentive plan awards outstanding and held by Hollywood

Media’s named executive officers.

Upon the consummation of the Broadway Sale (which occurred on December 15, 2010),

all of the unvested restricted shares of Hollywood Media common stock granted to Mitchell Rubenstein, our Chairman and Chief Executive

Officer, and Laurie S.

Silvers, our Vice-Chairman, President and Secretary, pursuant to Hollywood Media’s 2004 Stock Incentive

Plan immediately vested and thus were no longer restricted shares.

Plans Providing for Payment of Retirement

Hollywood Media does

not provide pension arrangements or post-retirement health coverage for its executives or employees.

For a discussion

of Hollywood Media’s 401(K) Plan (that was terminated effective November 18, 2010), please see “Other Benefits- 401(K)

Agreements Providing Potential Payments

Upon Termination or Change-in-Control

See “Employment

Agreements with Named Executive Officers”

above for a description of agreements that provide payments to a named executive

officer at, following, or in connection with the resignation, retirement or other termination of a named executive officer, or

a change in control of Hollywood Media or a change in the a named executive officer’s responsibilities following a change

Director Compensation

The following table

sets forth information regarding the compensation received by each of Hollywood Media’s Directors during 2012:

Incentive Plan

Non-Qualified

Mitchell Rubenstein, Chairman (1)

Silvers, Vice Chairman (1)

Rubenstein and Ms.

executive officers and employees of Hollywood Media, and their compensation is reported separately above in the “Executive

Compensation”

portion of this Annual Report on Form 10-K, prior to this “Director Compensation”

(2) The table below shows the aggregate

number of shares subject to all outstanding stock options held by the named directors as of December 31, 2012 all of which options

were granted under the Directors Stock Option Plan for non-employee directors (described below).

Total Options Held

at 12/31/2012

(# of shares)

Retainer and Meeting Fees

Directors of Hollywood

Media who are neither employees nor consultants (“non-employee directors”) are compensated at the rate of $2,500 for

each meeting of the Board of Directors attended in person, $500 for each meeting of the Board attended by telephone, and $500 for

each committee meeting attended.

Directors are reimbursed for travel and lodging expenses in connection with their attendance at

In addition, commencing January 1, 2008, non-employee directors are paid $25,000 per year of service on the

Board, and the chairman of any committee of the Board is paid an additional $25,000 per year of service as chairman.

current Chairman of the Compensation Committee is Harry Hoffman.

Directors Stock Option Plan

Hollywood Media’s

shareholder-approved Directors Stock Option Plan (the “Directors Plan”) was initially adopted in 1993, was subsequently

amended, and has been approved by Hollywood Media’s shareholders.

No stock options may be granted under the Directors Plan

after July 1, 2008.

The Directors Plan continues in effect until all options granted thereunder have expired or been exercised,

unless the Directors Plan is terminated at an earlier time.

The Directors Plan

provides for grants of stock options, subject to availability of shares under the plan, to each non-employee director, as follows:

(1) an initial grant of an option to purchase 15,000 shares of common stock at the time such person first becomes appointed to

the Board, and (2) an annual grant of an option to purchase 15,000 shares of common stock on the date of each annual meeting of

Hollywood Media’s shareholders at which the director is reelected.

In December 2007, the Board of Directors elected

to temporarily suspend such annual option issuances until such time that the Board determines to reserve additional shares of common

stock for issuance upon exercise of options granted under the Directors Plan.

During the year ended December 31,

2012, no options were cancelled, expired, granted or exercised under the Directors Plan.

The maximum aggregate

number of shares of common stock that may be issued pursuant to options granted under the Directors Plan is 300,000, and, as of

December 31, 2012, such options were outstanding for an aggregate of 75,000 shares.

The exercise price

per share of any option granted under the Directors Plan is the “Fair Market Value”

per share of common stock (based

on the prevailing stock market price per share of common stock, as defined in the Directors Plan) on the date preceding the date

the option is granted.

These options become exercisable six months after the date of grant and expire ten years after the date

of grant, subject to earlier termination upon certain conditions as provided in the plan.

The Board of Directors, in its discretion,

may cancel all options granted under the Directors Plan that remain unexercised on the date of consummation of certain corporate

transactions described in the Directors Plan.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain

information regarding the beneficial ownership of the common stock of Hollywood Media as of March 15, 2013, or other date as indicated

in the footnotes below, by:

each person or group known by Hollywood Media to beneficially own more than 5% of the outstanding

shares of common stock of Hollywood Media;

each director of Hollywood Media;

each executive officer of Hollywood Media;

all of the current directors and executive officers of Hollywood Media as a group.

Name and Address

of Beneficial Owner (1)

Number of Shares

Percent of Class (2)

Baker Street Capital L.P.

( 288,174,780 )

CCM Master Qualified Fund, Ltd.

Balance, December 31, 2022

$ 290,604,327

Dimensional Fund Advisors, LP

$ ( 288,940,510 )

Morgan Stanley

$ ( 199,754 )

Nantahala Capital Management, LLC

$ 290,604,327

Mitchell Rubenstein and Laurie S.

$ ( 288,940,510 )

All directors, director nominees and executive officers of Hollywood Media as a group (5 persons)

$ ( 199,754 )

* Less than 1%

(1) Except as otherwise noted in the footnotes below, the address of each beneficial owner is in care

of Hollywood Media Corp., 301 E.

Yamato Road, Suite 2199, Boca Raton, Florida 33431.

(2) For purposes of this table, “beneficial ownership”

is determined in accordance with

Rule 13d-3 under the Securities Exchange Act of 1934, as amended, pursuant to which a person’s or group’s ownership

is deemed to include any shares of common stock that such person has the right to acquire within 60 days.

For purposes of computing

the percentage of outstanding shares of common stock held by each person or group of persons named above, any shares which such

person or persons has the right to acquire within 60 days are deemed to be outstanding, but such shares are not deemed to be outstanding

for the purpose of computing the percentage ownership of any other person.

This table has been prepared based on 22,651,766 shares

of Hollywood Media common stock outstanding as of March 15, 2013.

(3) Based on a Schedule 13D/A filed with the SEC on March 3, 2011, Baker Street Capital L.P., Baker

Street Capital Management, LLC and Vadim Perelman beneficially own such shares.

The reported business address for these holders

is 12026 Wilshire Blvd., Unit 502, Los Angeles, California 90025.

(4) Based on a Schedule 13G/A filed with the SEC on February 15, 2012, CCM Master Qualified Fund, Ltd.,

Coghill Capital Management, L.L.C.

Coghill have shared voting and shared dispositive power with respect to such shares.

The reported business address for these holders is One North Wacker Drive, Suite 4350, Chicago, IL 60606.

(5) Based on a Schedule 13G/A filed with the SEC on February 11, 2011, Dimensional Fund Advisors, LP

beneficially owns such shares.

The reported business address for this holder is Palisades West, Building One, 6300 Bee Cave Road,

Austin, Texas, 78746.

(6) Based on a Schedule 13G/A filed with the SEC on January 30, 2013, Morgan Stanley and Morgan Stanley

Capital Services LLC beneficially own such shares.

The reported business address for these holders is 1585 Broadway, New York,

(7) Based on a Schedule 13G/A filed with the SEC on February 14, 2013, Nantahala Capital Management,

LLC beneficially owns such shares.

The reported business address for this holder is 100 First Stamford Place, 2nd Floor, Stamford,

(8) Represents 343,697 outstanding shares of common stock which are owned jointly by Mitchell Rubenstein

and Laurie Silvers, 513,919 outstanding shares of common stock which are owned individually by Laurie S.

Silvers, 18,169 outstanding

shares of common stock which are held in Individual Retirement Account of Mitchell Rubenstein, and 18,147 outstanding shares of

common stock which are held in Individual Retirement Account of Laurie S.

(9) Based on a Form 4 filed with the SEC on March 1, 2011, Mr.

Gans beneficially owns such shares.

The reported business address for this holder is 1680 Michigan Avenue, Suite 1001, Miami Beach, Florida 33139.

(10) Represents 13,000 outstanding shares

of common stock, and 60,000 shares of common stock issuable pursuant

to exercisable options, beneficially owned by Mr.

(11) Represents 1,000 outstanding shares

of common stock, and 15,000 shares of common stock issuable pursuant

to exercisable options, beneficially owned by Mr.

(12) Represents an aggregate of 3,012,124

outstanding shares of common stock and 75,000 shares of common stock

issuable pursuant to exercisable options.

Securities authorized for

issuance under equity compensation plans.

The following table sets forth information as of December 31, 2012, regarding compensation

plans under which equity securities of Hollywood Media are authorized for issuance, aggregated by “Plan category”

as indicated in the table:

EQUITY COMPENSATION PLAN INFORMATION

AS OF DECEMBER 31, 2012

Number of securities

be issued upon

outstanding options,

warrants and rights

Weighted average

exercise price per

options, warrants

Number of securities

remaining available for

future issuance under

equity compensation

Plan Category:

Equity compensation plans approved by security holders (2)

Equity compensation plans not approved by security holders

(1) Excluding securities reflected in column “(a).”

(2) Hollywood Media has four shareholder-approved equity compensation plans:

the 2004 Stock Incentive

Plan, 2000 Stock Incentive Plan, 1993 Stock Option Plan, and the Directors Stock Option Plan.

No additional grants of stock options

may be made under the 1993 Stock Option Plan, the Directors Stock Option Plan, or the 2000 Stock Incentive Plan because the periods

for granting options under such plans expired in July 2003, July 2008, and December 2009, respectively.

In addition to stock options,

the 2004 Stock Incentive Plan permits the granting of stock awards and other forms of equity compensation and, as of December 31,

2012, the number of shares available for granting additional awards under the 2004 Stock Incentive Plan was 502,261 shares.

information about such plans and awards is provided in Note (4) and other Notes to the Consolidated Financial Statements included

in Part II, Item 8 of this Annual Report on Form 10-K.

Certain Relationships and Related Transactions,

and Director Independence.

Hollywood Media recorded

$412,684 and $729,351 in earn-out gain from R&S Investments, LLC during 2012 and 2011, respectively.

As 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.

As of December 31, 2011, the Company had $521,497 included

in “Related party receivable”

in our accompanying consolidated balance sheet which consisted of $371,353 in earn-out

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 $2,576 for taxes receivable from Mr.

Rubenstein and Ms.

During the years ended December 31, 2011 and 2012, Hollywood Media received such earn-out amounts and expense reimbursements

in accordance with the payment terms.

Sale of Hollywood.com

Business Unit to R&S Investments LLC

On August 21, 2008,

Hollywood Media and R&S Investments, LLC (“R&S Investments”), an entity wholly-owned by Mitchell Rubenstein,

Hollywood Media’s Chief Executive Officer and Chairperson of the Board, and Laurie S.

Silvers, Hollywood Media’s President

and Vice-Chairperson of the Board, entered into a Purchase Agreement (as amended, the “R&S Purchase Agreement”).

Pursuant to the R&S Purchase Agreement, R&S Investments acquired Hollywood Media’s subsidiaries Hollywood.com,

and Totally Hollywood TV, LLC (collectively, the “Hollywood.com Business”) for a potential purchase price of $10.0

million, which included $1.0 million in cash that was paid to Hollywood Media at closing and potential earnout payments of up to

$9.0 million, of which $1,892,692 had been paid as of August, 2012.

The Hollywood.com Business

(i) Hollywood Media’s Hollywood.com, Inc.

subsidiary, which owned the Hollywood.com website and related URLs and

celebrity fan websites.

Hollywood.com features in-depth movie information including movie showtimes listings, celebrity biographical

data, and celebrity photos primarily obtained by Hollywood.com through licenses with third party licensors which are made available

on the Hollywood.com website and mobile platform.

Hollywood.com also has celebrity fan sites and a library of feature stories and

interviews which incorporate photos and multimedia videos taken at entertainment events including movie premiers and award shows;

and (ii) Hollywood Media’s Totally Hollywood TV, LLC subsidiary, which owned Hollywood.com Television, a free video on demand

service distributed pursuant to annual affiliation agreements with certain cable operators for the distribution of movie trailers

to subscribers of those cable systems.

The purchase price was determined by an arms-length negotiation between a Special Committee

of independent directors of Hollywood Media on the one hand and R&S Investments on the other hand.

Hollywood Media does not

have a significant continuing involvement in the Hollywood.com Business operations.

On August 28, 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 independent directors.

Pursuant to the R&S

Agreement, in exchange for R&S Investments paying Hollywood Media $2,950,000 in cash (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 December 31, 2012.

Pursuant to the Rubenstein

Silvers Letter Agreement, Mr.

Rubenstein agreed that 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 MovieTickets.com 5% Interest (as defined in the Amended and Restated

Employment Agreement dated as of December 22, 2008, between Hollywood Media and Mr.

Rubenstein, as amended (the “Rubenstein

Employment Agreement”)) that would be distributed by Hollywood Media to Mr.

Rubenstein pursuant to the Rubenstein Employment

Agreement will be retained by Hollywood Media (and not paid to Mr.

In addition, pursuant

to the Rubenstein Silvers Letter Agreement, Ms.

Silvers 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 MovieTickets.com 5% Interest (as defined in the Amended

and Restated Employment Agreement dated as of December 22, 2008, between Hollywood Media and Ms.

Silvers, as amended (the “Silvers

Employment Agreement”)) that would be distributed by Hollywood Media to Ms.

Silvers pursuant to the Silvers Employment Agreement

will be retained by Hollywood Media (and not paid to Ms.

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 Investments shall pay to Hollywood Media $3,500,000 or, if less, the amount received

by R&S Investments in connection with such transaction.

A Special Committee

of Hollywood Media’s independent directors unanimously approved the R&S Agreement and the Rubenstein Silvers Letter Agreement

and determined that the transactions contemplated by the R&S Agreement and the Rubenstein Silvers Letter Agreement were advisable,

fair to and in the best interests of Hollywood Media and its shareholders.

In connection with approving the transactions contemplated

by the R&S Agreement and the Rubenstein Silvers Letter Agreement, the Special Committee of Hollywood Media’s independent

directors received a fairness opinion from a firm with experience in valuation work, which stated that as of August 28, 2012, based

upon and subject to (and in reliance on) the assumptions made, matters considered and limits of such review, in each case as set

forth in its opinion, the Buyout Amount to be paid by R&S Investments was fair from a financial point of view to Hollywood

See Note 5, “Discontinued

Operations”

in the Notes to the Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form

10-K for more information on the R&S Agreement, the Rubenstein Silvers Letter Agreement, the R&S

Letter, and the related transactions.

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 Corp.

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.

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 agrees 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 the Company by a Special Committee of Hollywood Media’s independent directors.

Acquisition of Baseline

On October 7, 2011,

Project Hollywood LLC (“Project Hollywood”), a limited liability company owned by Baseline Holdings LLC (“Baseline

Holdings”) acquired from The New York Times Company all of the membership interests of Baseline LLC.

Baseline Holdings is

wholly-owned by Mitchell Rubenstein, the Chairman and Chief Executive Officer of Hollywood Media, and Laurie Silvers, the Vice-Chairman,

President and Secretary of Hollywood Media.

Baseline LLC owns Baseline StudioSystems, a leading provider of movie and TV data services

for the entertainment and motion picture industries and a licensor of information to Internet and digital media companies.

Rubenstein and Ms.

Silvers individually contributed $4.5 million in cash to Baseline Holdings LLC which in turn contributed $4.5

million to Project Hollywood LLC to fund the acquisition.

Hollywood Media previously

owned the Baseline StudioSystems business and sold it on August 25, 2006 to The New York Times Company.

The opportunity to purchase

the Baseline StudioSystems business was presented to Mr.

Rubenstein and Ms.

Silvers in their individual capacity, and they presented

to Hollywood Media’s independent directors the opportunity for Hollywood Media.

Rather than acquire 100% of the Baseline

StudioSystems business, Hollywood Media’s independent directors decided unanimously for Hollywood Media to make a minority

investment in Project Hollywood LLC alongside Mr.

Rubenstein and Ms Silvers with the relative ownership interest of Project Hollywood

LLC interests determined based on the proportionate amount each invested.

On October 27, 2011,

following Project Hollywood LLC’s acquisition (on October 7, 2011) of all of the membership interests of Baseline

LLC, Hollywood Media (following the unanimous approval of its independent directors) acquired a 21.74% ownership interest in Project

Hollywood LLC for an investment of $1.25 million, which was based on the same per membership unit price paid by Baseline Holdings

for its 78.26% ownership interest in Project Hollywood LLC.

The funds contributed were used for working capital and other capital

needs of the Baseline StudioSystems business.

The Baseline StudioSystems business had no debt other than normal accounts payable

and deferred revenue.

Distributions of $176,866

and $182,617 to Hollywood Media reduced Hollywood Media’s investment in Project Hollywood during the years ended December

31, 2011 and 2012, respectively.

The Project Hollywood

LLC Limited Liability Company Agreement provided that (i) distributions of available cash would be made in accordance with the

members’

percentage interests, (ii) Hollywood Media’s ownership interest in Project Hollywood LLC was subject

to a right of first refusal in favor of Project Hollywood LLC and Baseline Holdings in the event Hollywood Media desired to transfer

such ownership interest, (iii) if Baseline Holdings and/or its permitted transferees who together owned at least a majority of

Project Hollywood LLC agreed to sell its ownership interest in Project Hollywood LLC or vote in favor of a merger or consolidation

or a sale of all or substantially all of Project Hollywood’s assets, Hollywood Media was required to consent to the transaction,

waive any appraisal rights, and agree to sell its ownership interest in Project Hollywood LLC on the same terms and conditions

as other members;

and (iv) if Baseline Holdings desired to sell its ownership interest in Project Hollywood LLC, Hollywood Media

would be able to participate in such sale by selling a proportionate amount of its interest in Project Hollywood LLC.

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.

On August 28, 2012,

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

Baseline Holdings LLC, Project Hollywood, Mr.

Rubenstein and Ms.

As described below, the Assignment and the transactions

contemplated by the Assignment were approved by a Special Committee of Hollywood Media’s independent directors.

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

has been paid as follows:

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

waived his right to receive any future principal and interest owed by Key Brand Entertainment Inc.

(“Key Brand”) to

Hollywood Media pursuant to the Credit Agreement between Key Brand and Hollywood Media (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 Credit Agreement), and (3) Ms.

waived her right to receive any future principal and interest owed by Key Brand to Hollywood Media 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 Credit

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 consolidated balance sheets of Hollywood Media included in Part II, Item 8 of this Annual Report

on Form 10-K.

As a result of the

waivers by Mr.

Rubenstein and Ms.

Silvers described in the preceding paragraph, after August 28, 2012, Hollywood Media will retain

all payments of principal and interest made by Key Brand under the Theatre Direct Credit Agreement.

As of August 28, 2012, the

principal balance due under the Credit Agreement 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

A Special Committee

of Hollywood Media’s independent directors unanimously approved the Assignment and determined that the transactions contemplated

by the Assignment were advisable, fair to and in the best interests of Hollywood Media and its shareholders.

In connection with

approving the transactions contemplated by the Assignment, the Special Committee of Hollywood Media’s independent directors

received a fairness opinion from a firm with experience in valuation work, which stated that as of August 28, 2012, based upon

and subject to (and in reliance on) the assumptions made, matters considered and limits of such review, in each case as set forth

in its opinion, the Project Hollywood Purchase Price was fair from a financial point of view to Hollywood Media.

Resolution of Dispute

with The Estate of Martin H.

On February 8, 2012,

Hollywood Media resolved its dispute with The Estate of Martin H.

Greenberg (the “Greenberg Estate”) over the life

insurance policy payments that were received as a result of Dr.

Martin Greenberg’s death.

Greenberg’s

Greenberg had served as the Chief Executive Partner of Tekno Books (which was 51% owned by Hollywood Media prior to

the resolution of such dispute).

As a result of such

resolution, effective as of December 30, 2011, the Greenberg Estate and Rosalind M.

Greenberg (Dr.

Greenberg’s widow) waived

any right, entitlement or claim they may have to a $1.5 million key-man life insurance policy payment, Tekno Books and Hollywood

Media waived any right, entitlement or claim they may have to a $500,000 life insurance policy payment received by Rosalind M.

Greenberg, and the Greenberg Estate transferred its 49% partnership and ownership interest in Tekno Books to Hollywood Media for

no additional consideration pursuant to an Assignment of General Partnership Interest.

Following such transfer, Hollywood Media

owns 100% of Tekno Books.

Director Independence

Hollywood Media’s

Board of Directors consists of five directors.

The Board has determined that a majority of the current members of the

Board (Harry T.

Hoffman, Robert D.

Epstein and Stephen Gans) are independent directors of Hollywood Media as defined under the

Securities Exchange Act of 1934 and rules thereunder and under the listing rules of the Nasdaq Stock Market.

In making these determinations,

the Board concluded that none of these independent Board members had or has a relationship which, in the opinion of the Board,

would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Principal Accounting Fees

and Services.

Independent Registered Public Accounting Firm’s Fees

The following table

shows fees billed to Hollywood Media by its independent registered public accounting firms, Marcum, LLP and Kaufman Rossin &

Co., P.A., for each of the two fiscal years ended December 31, 2012 and 2011, respectively, for services rendered in the specified

categories indicated below.

Audit Fees (1)

Audit-Related Fees

All Other Fees

2012 consists of audit fees for Marcum, LLP of $125,000 and audit fees for Kaufman

Rossin & Co., P.A.

The fee types referenced in the above table

are defined as follows:

are aggregate fees billed by Hollywood Media’s principal auditing firm for professional services for the

audit of Hollywood Media’s consolidated financial statements included in its Form 10-K, for review of financial statements

included in its Forms 10-Q, or for services that are normally provided by the accountant in connection with statutory and regulatory

filings or engagements.

Audit-Related

are fees billed by Hollywood Media’s principal auditing firm for assurance and related services that are

reasonably related to the performance of the audit or review of Hollywood Media’s financial statements.

Such services

include principally services associated with reports related to regulatory filings, and general accounting and reporting advice.

are fees billed by Hollywood Media’s principal auditing firm for professional services for tax compliance,

tax advice, and tax planning.

Other Fees ”

are fees billed by Hollywood Media’s principal auditing firm for any services not included in the forgoing

fee categories.

Audit Committee

Pre-Approval Policies and Procedures

SEC rules require

that audit services and permitted non-audit services provided by our principal auditing firm be pre-approved by our Audit Committee.

rules permit such pre-approval to be given either through explicit approval by the Audit Committee on a case-by-case basis, or

pursuant to pre-approval policies and procedures as may be established by the Audit Committee from time to time.

For each of the two

fiscal years ended December 31, 2012 and 2011, respectively, and through the date of this Form 10-K, the Audit Committee has not

adopted pre-approval policies covering such periods or future periods.

Accordingly, any services provided by our principal

auditing firm during the period January 1, 2011 through the date of this Form 10-K were approved by the Audit Committee

on a case-by-case basis.

However, in the future the Audit Committee may adopt pre-approval policies and procedures in

accordance with applicable rules.

Exhibits and Financial Statement

(a) The following documents are filed

as a part of this Annual Report on Form 10-K:

Financial Statements

The following financial statements are

included in Part II, Item 8 of this Annual Report on Form 10-K:

Reports of Independent Registered Public Accounting

Consolidated Balance Sheets as of December 31, 2012 and December 31, 2011

Consolidated Statements of Operations for the Years Ended December 31, 2012 and 2011

Consolidated Statements of Shareholders’

Equity for the Years Ended December 31, 2012 and

Consolidated Statements of Cash Flows for the Years Ended December 31, 2012 and 2011

Notes to Consolidated Financial Statements

Financial Statement Schedules

Financial statement schedules are omitted

because they are not required or are not applicable, or the required information is provided in the consolidated financial statements

or notes thereto described in Item 15(a)(1) above.

The Exhibits listed below are filed as

part of this Annual Report on Form 10-K.

Stock Purchase Agreement dated as of December 22, 2009, by and between Hollywood Media Corp.

and Key Brand Entertainment Inc., as amended by Amendment No.

1 to Stock Purchase Agreement, dated as of January 13, 2010, by and between Hollywood Media Corp.

and Key Brand Entertainment Inc., as further amended by Amendment No.

2 to Stock Purchase Agreement, dated as of January 21, 2010, by and between Hollywood Media Corp.

and Key Brand Entertainment Inc., as further amended by Amendment No.

3 to Stock Purchase Agreement, dated as of April 9, 2010, by and between Hollywood Media Corp.

and Key Brand Entertainment Inc.

Amendment No.

4 to Stock Purchase Agreement, dated as of April 22, 2012, by and between Key Brand Entertainment Inc.

and Hollywood Media Corp.

Third Amended and Restated Articles of Incorporation.

Articles of Amendment to Articles of Incorporation of Hollywood Media Corp.

for Designation of Preferences, Rights and Limitations of Series E Junior Preferred Stock.

Amended and Restated Bylaws of Hollywood Media Corp., dated as of September 1, 2006.

Form of Common Stock Certificate.

Amended and Restated Rights Agreement dated as of August 23, 1996 between Hollywood Media Corp.

(f/k/a Big Entertainment, Inc.) and American Stock Transfer & Trust Company, as Rights Agent.

Amendment No.

1, dated as of December 9, 2002, to Amended and Restated Rights Amendment dated as of August 23, 1996 between Hollywood Media Corp.

and American Stock Transfer & Trust Company.

Amendment No.

2, dated as of September 1, 2006, to the Amended and Restated Rights Agreement dated as of August 23, 1996, as amended December 9, 2002, between Hollywood Media Corp.

and American Stock Transfer & Trust Company.

Amendment No.

3, dated as of January 13, 2011, to the Amended and Restated Rights Agreement dated as of August 23, 1996, as amended by Amendment No.

1 dated as of December 9, 2002 and Amendment No.

2 dated as of September 1, 2006, between Hollywood Media Corp.

and American Stock Transfer & Trust Company

Amendment No.

4, dated as of September 2, 2011, to the Amended and Restated Rights Agreement, dated as of August 23, 1996, as amended by Amendment No.

1, dated as of December 9, 2002, Amendment No.

2, dated as of September 1, 2006, and Amendment No.

3, dated as of January 13, 2011, by and between Hollywood Media Corp.

and American Stock Transfer & Trust Company, LLC.

Amendment No.

5, dated as of September 16, 2011, to the Amended and Restated Rights Agreement, dated as of August 23, 1996, as amended by Amendment No.

1, dated as of December 9, 2002, Amendment No.

2, dated as of September 1, 2006, Amendment No.

3, dated as of January 13, 2011 and Amendment No.

4, dated as of September 2, 2011, by and between Hollywood Media Corp.

and American Stock Transfer & Trust Company, LLC.

Compensatory Plans, Contracts and Arrangements:

(a) 1993 Stock Option Plan, as amended effective October 1, 1999.

(b) Directors Stock Option Plan, as amended effective May 1, 2003.

(d) 2004 Stock Incentive Plan.

(e) Hollywood Media Corp.

401(k) Retirement Savings Plan, dated as of September 16, 2004 (the “Plan”);

Amendment to the Plan, dated as of September 16, 2004;

related Volume Submitter (Cross-Tested Defined Contribution Plan and Trust);

EGTRRA Amendment to the Plan and Post-EGTRRA Amendment to the Plan, dated as of September 16, 2004.

(f) Amendment to Hollywood Media Corp.

401(k) Retirement Savings Plan, dated June 16, 2005.

(g) Amended and Restated Employment Agreement, dated as of December 22, 2008, by and between Hollywood Media Corp.

and Mitchell Rubenstein.

(h) Amended and Restated Employment Agreement, dated as of December 22, 2008, by and between Hollywood Media Corp.

and Laurie S.

(i) Amendment to Amended and Restated Employment Agreement, dated as of December 23, 2009, by and between Hollywood Media Corp.

and Mitchell Rubenstein.

(j) Amendment to Amended and Restated Employment Agreement, dated as of December 23, 2009, by and between Hollywood Media Corp.

and Laurie S.

(k) Amendment No.

2 to Amended and Restated Employment Agreement, dated as of May 13, 2011 by and between Hollywood Media Corp.

and Mitchell Rubenstein

(l) Amendment No.

2 to Amended and Restated Employment Agreement, dated as of May 13, 2011 by and between Hollywood Media Corp.

and Laurie S.

(m) Amended and Restated Employment Agreement, dated as of August 9, 2006, by and between Hollywood Media Corp.

and Scott Gomez.

Agreement for the Sale and Purchase of UK Theatres Online Limited and other Companies, dated November 22, 2005, by and among Cinemasource UK Limited, Jeffrey Spector and the other shareholders party thereto.

Agreement for the Sale and Purchase of CinemasOnline Limited, dated November 22, 2005, by and between Mitchell Clifford Cartwright and Cinemasource UK Limited.

Note Purchase Agreement, dated as of November 22, 2005, by and among Hollywood Media Corp.

and each of the Purchasers, including the forms of Notes and Warrants issued to the Purchasers and the form of registration rights agreement.

Registration Rights Agreement dated November 23, 2005 by and among Hollywood Media Corp.

and the investors signatory thereto.

Letter agreements dated March 15, 2006, by and between Hollywood Media Corp.

and each of the holders of its 8% Senior Unsecured Notes dated November 23, 2005.

Form of Common Stock Purchase Warrants dated March 15, 2006, issued to the Holders of Hollywood Media Corp.’s 8% Senior Unsecured Notes dated November 23, 2005.

Stock Purchase Agreement, dated as of August 25, 2006, by and between The New York Times Company and Hollywood Media Corp.

Asset Purchase Agreement, dated as of February 1, 2007, by and among Theatre Direct NY, Inc., Showtix LLC and each of the members of Showtix LLC.

Asset Purchase Agreement, dated as of August 24, 2007, by and among Hollywood Media Corp., Showtimes.com, Inc.

Brett West and West World Media, LLC.

Purchase Agreement dated as of August 21, 2008, between Hollywood Media Corp.

and R&S Investments, LLC.

Transition Services Agreement dated as of August 21, 2008 between Hollywood Media Corp., Hollywood.com, LLC and Totally Hollywood TV, LLC.

Amendment to Purchase Agreement dated September 30, 2009 between Hollywood Media Corp.

and R&S Investments, LLC.

Second Amendment to Purchase Agreement dated as of May 11, 2012 between Hollywood Media Corp.

and R&S Investments, LLC.

Escrow Agreement, dated as of December 22, 2009, by and between Hollywood Media Corp., Key Brand Entertainment Inc.

and The Bank of New York Mellon.

Second Lien Credit, Security and Pledge Agreement, dated as of December 15, 2010, by and among Key Brand Entertainment Inc., Theatre Direct NY, Inc.

and Hollywood Media Corp.

Amendment No.

1 to Second Lien Credit, Security and Pledge Agreement, dated as of April 22, 2012, by and among Key Brand Entertainment Inc., Theatre Direct NY, Inc., and Hollywood Media Corp.

Amendment No.

2 to Second Lien Credit, Security and Pledge Agreement, dated as of December 31, 2012, by and among Key Brand Entertainment Inc., Theatre Direct NY, Inc., and Hollywood Media Corp.

Subordination and Intercreditor Agreement, dated as of December 15, 2010, by and among JPMorgan Chase Bank, N.A., Hollywood Media Corp.

and Key Brand Entertainment Inc.

Amendment No.

1 to Subordination and Intercreditor Agreement, dated as of April 22, 2012, among JPMorgan Chase Bank, N.A., Hollywood Media Corp., and Key Brand Entertainment Inc.

Subordination and Intercreditor Agreement, dated as of December 31, 2012, among Terido LLP, Hollywood Media Corp., and Key Brand Entertainment Inc.

Warrant to Purchase Shares of Common Stock of Theatre Direct NY, Inc.

dated December 15, 2010

Amendment to the Warrant to Purchase Shares of Common Stock of Theatre Direct NY, Inc.

dated December 31, 2012

Agreement, dated as of October 7, 2010, among Hollywood Media Corp.

and Baker Street Capital L.P., Baker Street Capital Management, LLC and Vadim Perelman

Indemnification Agreement, dated as of February 2, 2011, between Hollywood Media Corp.

and R&S Investments, LLC

Project Hollywood LLC Limited Liability Company Agreement dated October 27, 2011, between Hollywood Media Corp.

and Baseline Holdings LLC.

Share Purchase Agreement, dated as of May 1, 2012, between Hollywood Media Corp.

and Orchard Advertising Limited

Share Charge Deed, dated as of May 1, 2012, between Hollywood Media Corp.

and Orchard Advertising Limited

Assignment and Assumption of Membership Interest and Waiver dated as of August 28, 2012 among Hollywood Media Corp., Baseline Holdings LLC, Project Hollywood LLC, Mitchell Rubenstein and Laurie S.

Agreement dated as of August 28, 2012 between Hollywood Media Corp.

and R&S Investments, LLC.

Letter Agreement dated as of August 28, 2012 among Hollywood Media Corp., Mitchell Rubenstein and Laurie S.

Letter dated as of August 28, 2012 from R&S Investments, LLC to Hollywood Media Corp.

regarding a contingent additional payment.

Letter dated October 15, 2012 from Kaufman, Rossin & Co., P.A.

to the Securities and Exchange Commission.

Subsidiaries of Hollywood Media.

Consent of Marcum LLP Independent Registered Public Accounting Firm.

Consent of Kaufman Rossin & Co., P.A., Independent Registered Accounting Firm.

Certification of Chief Executive Officer (principal executive officer) pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Certification of Chief Financial Officer and Chief Accounting Officer (principal financial and accounting officer) pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Certification of Chief Executive Officer (principal executive officer) pursuant to 18 U.S.C.

Certification of Chief Financial Officer and Chief Accounting Officer (principal financial and accounting officer) pursuant to 18 U.S.C.

Assignment of General Partnership Interest, effective as of December 30, 2011, by and between The Estate of Martin H.

Greenberg and Hollywood Media Corp.

The following financial information from Hollywood Media Corp.’s Annual Report on Form 10-K for the year ended December 31, 2012, formatted in XBRL (eXtensible Business Reporting Language):

(i) Consolidated Balance Sheets as of December 31, 2012 and December 31, 2011, (ii) Consolidated Statements of Operations for the Years Ended December 31, 2012 and 2011, (iii) Consolidated Statements of Shareholders’

Equity for the Years Ended December 31, 2012 and 2011, (iv) Consolidated Statements of Cash Flows for the Years Ended December 31, 2012 and 2011, and (v) Notes to Consolidated Financial Statements.

Filed as an exhibit to this Annual Report on Form 10-K.

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise are not subject to liability under these sections.

Submitted electronically with this Annual Report on Form 10-K.

Incorporated by reference from Exhibit 3.1 filed with Hollywood Media’s Annual Report on Form 10-K for the year ended December 31, 2000 (File/Film No.:

001-14332/1591887) filed April 2, 2001.

Incorporated by reference from Exhibit 3.1 filed with Hollywood Media’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (File/Film No.:

001-14332/041147084) filed November 15, 2004.

Incorporated by reference from Exhibit 3.1 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/061074750) filed on September 5, 2006.

Incorporated by reference from the exhibit filed with Hollywood Media’s Registration Statement on Form SB-2 (No.

Incorporated by reference from the exhibit filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/99731206) filed on October 20, 1999.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/02852890) filed on December 10, 2002.

Incorporated by reference from Exhibit 4.1 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/061074750) filed on September 5, 2006.

Incorporated by reference from Exhibit 10.1(e) filed with Hollywood Media’s Annual Report on Form 10-K for the year ended December 31, 1999 (File/Film No.:

001-14332/589848) filed March 31, 2000.

Incorporated by reference from Appendix B to Hollywood Media’s Proxy Statement filed on November 13, 2003 for its 2003 Annual Meeting of Shareholders (File/Film No.:

accompanying notes are an integral part of these financial statements.

INTERNATIONAL CORP.

OF CASH FLOWS

Cash flows from operating

$ ( 1,345,628 )

Incorporated by reference from Appendix C to Hollywood Media’s Proxy Statement filed on November 13, 2003 for its 2003 Annual Meeting of Shareholders (File/Film No.:

required to reconcile loss to net cash used in operating

in loss of equity method investees

Gain on dilution of equity method investment

interest added to long-term note payable

of marketable securities

of convertible financial instrument

in operating assets and liabilities:

receivable, administrative fees

(decrease) in other current assets

(decrease) in other liabilities

cash used in operating activities

Cash flows from investing

Proceeds from the sale of

marketable securities

Purchase of property and equipment

Net cash provided by investing

Cash flows from financing

from (repayment of) note payable, current

from a convertible financial instrument

of shares, net

from long-term note payable

cash from financing activities

Net change in cash

at the beginning of the year

at the end of the year

Supplemental cash flow information:

Cash paid during the year

accompanying notes are an integral part of these financial statements.

INTERNATIONAL CORP.

to Financial Statements

1— NATURE OF OPERATIONS

International Corp.

(“NovelStem” or the “Company”) is a holding company whose principal assets are an approximate

31 % equity interest in NewStem Ltd, an Israeli biotech company (“NewStem”), and a 50 % equity interest in NetCo Partners (“NetCo”).

NovelStem was formerly known as Hollywood Media Corp.

The Company was incorporated in the State of Florida on January 22, 1993 and changed

its name to NovelStem International Corp.

in September 2018 as a result of its business focus shift from a media business to cutting

edge biotech.

focuses on the development and commercialization of diagnostic technology that can predict patients’ anti-cancer drug resistance,

allowing for targeted cancer treatments and the potential to reduce resistance to chemotherapy.

is a legacy media business interest which owns “Net Force”, a book publishing franchise.

and Management’s Plans

inception, the Company has accumulated a deficit of approximately $ 289,000,000 .

The accumulated deficit of the Company subsequent to its business focus shift and name change in September 2018 is approximately $ 2,260,000 which is comprised primarily of allocated losses from equity method investments and general and administrative costs incurred

by the Company.

Company will need to obtain additional funds to continue its operations.

Management’s plans with regard to these matters include

additional financing and fundraising until its equity investment in NewStem is profitable.

Although management continues to pursue these

plans, there is no assurance that the Company will be successful in obtaining sufficient cash from financing on terms acceptable to the

Company, or that NewStem will become profitable (see Note 3).

May 2022, the Company entered into a finance agreement with two individuals who are shareholders and directors, which was amended in

July 2022, to borrow up to $ 600,000 for working capital needs (see Note 4).

Following this financing, the Company believes that its cash

resources are sufficient for the operations of the next 12 months.

2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The Financial Accounting Standards Board (“FASB”) has established the FASB Accounting Standards Codification (“ASC”)

as the single source of authoritative GAAP.

preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain

reported amounts and disclosures.

Accordingly, actual results could differ from those estimates.

INTERNATIONAL CORP.

to Financial Statements

and Cash Equivalents

and cash equivalents include certain investments in highly liquid debt instruments with original maturities of three months or less at

the date of purchase.

The Company had no cash equivalents as of either year end presented.

companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method

of accounting.

Whether or not the Company exercises significant influence with respect to an Investee depends on an evaluation of several

factors, including, among others, representation on the Investee company’s board of directors and ownership level, which is generally

a 20% to 50% interest in the voting securities of the Investee company.

Under the equity method of accounting, an Investee company’s

accounts are not reflected within the Company’s Balance Sheets or Statements of Operations;

however, the Company’s share

of the earnings or losses of the Investee company is reflected in the caption “Equity in net income (loss) of equity method investees”

in the Statements of Operations.

The Company’s carrying value in an equity method Investee company is reflected in the caption

“Investment in Investee company’ in the Company’s Balance Sheets.

the Company’s carrying value in an equity method Investee company is reduced to zero, no further losses are recorded in the Company’s

financial statements unless the Company guarantied obligations of the Investee company or has committed additional funding.

Investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its

share of losses not previously recognized.

The Company recognizes a gain or loss on dilution when the equity method

Investee company issues stock to third parties.

Company reviews equity investments for impairment on an annual basis, or earlier if events or changes in circumstances indicate that

the carrying amounts might not be recoverable.

Company holds a minority investment in an entity, NewStem, which is accounted for pursuant to the equity method of accounting.

Additionally,

the Company is a 50 % joint venture partner in NetCo which is accounted for pursuant to the equity method of accounting.

of common stock repurchased are recorded at cost as treasury stock.

INTERNATIONAL CORP.

to Financial Statements

Company accounts for stock-based awards in accordance with applicable accounting principles, which requires compensation expense related

to share-based transactions to be measured and recognized in the financial statements based on a determination of the fair value of the

stock options.

The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model.

all stock options, the Company recognizes expense over on an accelerated basis over the requisite service period (generally the vesting

period of the equity grant).

The Company’s option pricing model requires the input of highly subjective assumptions, including

the expected stock price volatility, expected term, and forfeiture rate.

Any changes in these highly subjective assumptions significantly

impact stock-based compensation expense.

awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance

with applicable accounting principles.

the event of the termination of an employee, third party service provider, officer or Director’s service on the Board of the Company

for any reason other than for cause, all of the Options which are then vested may be exercised within 18 months of such termination,

provided that, in no event shall this extension period continue beyond the expiration of the term of the option(s).

In addition, any

such extension shall be applicable only to the extent that such option or options are vested and exercisable according to the terms of

the Plan and this Agreement.

Any unvested options are immediately terminated on the effective date of the termination.

In the event of

termination of an employee, third party service provider, officer or Director’s service for cause, all Options are forfeited and

deemed cancelled and no longer exercisable on the date of termination.

Note 5 for the assumptions used to calculate the fair value of stock-based compensation.

Upon the exercise of options, it is the Company’s

policy to issue new shares rather than utilizing treasury shares.

income taxes are determined using the asset and liability method in accordance with Accounting Standards Codification (“ASC”)

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the

financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred income taxes are measured

using enacted tax rates expected to apply to taxable income in years in which such temporary differences are expected to be recovered

The effect of a change in tax rates on deferred income taxes is recognized in the statement of operations of the period that

includes the enactment date.

In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined

that it is more likely than not that some portion of the deferred tax asset will not be realized.

INTERNATIONAL CORP.

to Financial Statements

and Diluted Net Loss Per Share

net loss per share is computed by dividing the net loss by the weighted average number of shares outstanding during the year, excluding

treasury stock.

Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares outstanding

plus the dilutive potential of common shares which would result from the exercise of stock options and warrants.

The dilutive effects

of stock options and warrants are excluded from the computation of diluted net income per share if the effect of doing so would be antidilutive.

following data represents the amounts used in computing earnings per share and the effect on net income (loss) and the weighted average

number of shares of dilutive potential common stock:

SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OF DILUTIVE

Ended December 31,

Net loss available to common shareholders

$ ( 1,345,628 )

Incorporated by reference from Appendix B to Hollywood Media’s Proxy Statement filed on November 4, 2004 for its 2004 Annual Meeting of Shareholders (File/Film No.:

Weighted average shares outstanding:

Stock options

Basic and diluted net loss per share

Warrants and stock options excluded

from the above calculations are as follows:

SCHEDULE OF WARRANTS AND

STOCK OPTIONS

Year Ended December 31,

Stock options

3— EQUITY METHOD INVESTMENTS

2018, the Company entered into a Share Purchase Agreement with NewStem and other related parties to provide aggregate funding of up

to $ 4,000,000

This funding was to be provided through the sale of up to 50,000

common shares of NewStem to the Company representing 33 %

of New Stem’s outstanding shares.

In 2018, the Company purchased 25,000

shares of NewStem for $ 2,000,000

acquiring an ownership interest of 20 %.

The Company made additional investments in 2019 and 2020 purchasing 12,500

shares each year for a $ 1,000,000

investment each year.

NewStem sold and issued shares to third party investors in 2021 and 2022 resulting in the Company recognizing

a gain on dilution of equity method investment.

These transactions resulted in the Company having an ownership interest of 30.58 %

respectively, as of December 31, 2022 and 2021.

Company accounts for its investment in NewStem under the equity method.

At December 31, 2022 and 2021, the carrying value of the investment

in NewStem exceeded the underlying net assets of NewStem by $ 2,090,286 and $ 2,435,155 , respectively.

The excess relates to identified

intangible assets including license agreements, specialized work force (goodwill) and two separate projects of in process research and

development (“IPR&D”) related to stem cell-based diagnostics and therapeutics for cancer chemotherapies.

INTERNATIONAL CORP.

to Financial Statements

Company assesses its investment in NewStem for impairment on an annual basis.

is in the development stage and has incurred losses since its inception and has yet to generate any revenues.

NewStem will need to obtain

additional funds to continue its operations.

NewStem management’s plans with regard to these matters include continued development,

marketing and licensing of its products, as well as seeking additional financing arrangements.

Although management continues to pursue

these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from sales of products or financing

on terms acceptable to the Company.

NewStem obtained additional funding of approximately $ 1,450,000 in 2022 through the sale of

shares or ordinary stock.

following table represents the Company’s investment in NewStem:

SCHEDULE OF INVESTMENTS

Ended December 31,

Investment in NewStem, beginning

Allocation of net loss from NewStem

Gain on dilution of equity method investment

Purchase of NewStem shares

Investment in NewStem, ending

results of operations and financial position of the Company’s investment in NewStem are summarized below:

OF OPERATIONS AND FINANCIAL POSITION INVESTMENT

Ended December 31,

Condensed income statement information:

$ ( 2,341,000 )

Incorporated by reference from Exhibits 10.1 through 10.4 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/041034809) filed on September 17, 2004.

Incorporated by reference from Exhibit 10.5 filed with Hollywood Media’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (File/Film No.:

001-14332/051011105) filed on August 9, 2005.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/081272762 ) filed on December 29, 2008.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/081272762 ) filed on December 29, 2008.

Incorporated by reference from Exhibit 10.3 filed with Hollywood Media’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 (File/Film No.:

001-14332/061018473) filed on August 9, 2006.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/051227203) filed on November 28, 2005.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/051227203) filed on November 28, 2005.

Incorporated by reference from Exhibit 10.3 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/051227203) filed on November 28, 2005.

Incorporated by reference from Exhibit 4.6 filed with Hollywood Media’s Registration Statement on Form S-3 (No.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/06692013) filed on March 16, 2006.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/06692013) filed on March 16, 2006.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/061057226) filed on August 28, 2006.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Current Report on Form 8-K (File/Film No.:

001-14332/07582532) filed on February 6, 2007.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/071092197) filed on August 30, 2007.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/081040550) filed on August 27, 2008.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/081040550) filed on August 27, 2008.

Incorporated by reference from Exhibit 2.2 filed with Hollywood Media Corp’s Form 8-K (File/Film No.:

001-14332/ 091262820) filed on December 29, 2009.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media Corp’s Form 8-K (File/Film No.:

001-14332/ 091262820) filed on December 29, 2009.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media Corp’s Form 8-K (File/Film No.:

001-14332/ 091262820) filed on December 29, 2009.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media Corp’s Form 8-K (File/Film No.:

001-14332/ 091106205) filed on October 5, 2009.

Incorporated by reference from Annex A to Hollywood Media’s Definitive Proxy Statement filed on October 20, 2010 for the Special Meeting of Shareholders held on December 10, 2010 (File/Film No.:

$ ( 2,630,000 )

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/101255059) filed December 16, 2010.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/101255059) filed December 16, 2010.

Incorporated by reference from Exhibit 10.3 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/101255059) filed December 16, 2010.

Incorporated by reference from Exhibit 4.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 11528851) filed January 14, 2011.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 11528851) filed January 14, 2011.

Incorporated by reference from Exhibit 4.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 111073694) filed September 2, 2011.

Incorporated by reference from Exhibit 4.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 111095802) filed September 16, 2011.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 (File/Film No.:

001-14332/ 11847554) filed May 16, 2011.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 (File/Film No.:

001-14332/ 11847554) filed May 16, 2011.

Incorporated by reference from Exhibit 10.20 filed with Hollywood Media’s Annual Report on Form 10-K for the year ended December 31, 2010 (File/Film No.:

001-14332/ 11760405) filed April 14, 2011.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 111163361) filed October 28, 2011.

Incorporated by reference from Exhibit 99.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 12599088) filed February 13, 2012.

Incorporated by reference from Exhibit 2.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 12777791) filed April 25, 2012.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 12777791) filed April 25, 2012.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 12777791) filed April 25, 2012.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Form 8-K/A (File/Film No.:

001-14332/ 12844591) filed May 15, 2012.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media’s Form 8-K/A (File/Film No.:

001-14332/ 12844591) filed May 15, 2012.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 (File/Film No.:

001-14332/ 12845292) filed May 15, 2012.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 121071119) filed September 4, 2012.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 121071119) filed September 4, 2012.

Incorporated by reference from Exhibit 10.3 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 121071119) filed September 4, 2012.

Incorporated by reference from Exhibit 10.4 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 121071119) filed September 4, 2012.

Incorporated by reference from Exhibit 16.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 121150533) filed October 18, 2012.

Incorporated by reference from Exhibit 10.1 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 121293702) filed December 31, 2012.

Incorporated by reference from Exhibit 10.2 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 121293702) filed December 31, 2012.

Incorporated by reference from Exhibit 10.3 filed with Hollywood Media’s Form 8-K (File/Film No.:

001-14332/ 121293702) filed December 31, 2012.

Pursuant to the requirements

of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf

by the undersigned, thereunto duly authorized.

HOLLYWOOD MEDIA CORP.

April 1, 2013

/s/ Mitchell Rubenstein

Mitchell Rubenstein, Chairman of the Board

and Chief Executive Officer

Pursuant to the requirements

of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant

and in the capacities and on the dates indicated.

April 1, 2013

/s/ Mitchell Rubenstein

Mitchell Rubenstein, Chairman of the Board and

Chief Executive Officer (Principal executive officer)

April 1, 2013

/s/ Laurie S.

Silvers, Vice Chairman of the Board,

President and Secretary

April 1, 2013

Hedge, Chief Financial Officer

(Principal financial and accounting officer)

April 1, 2013

Hoffman, Director

April 1, 2013

/s/ Robert Epstein

Robert Epstein, Director

April 1, 2013

/s/ Stephen Gans

Stephen Gans, Director

Company’s allocation

of net loss from NewStem

$ ( 732,393 )

$ ( 864,558 )

of December 31,

Condensed balance sheet information:

Non-current assets

Current liabilities

Non-current liabilities

INTERNATIONAL CORP.

to Financial Statements

owns a 50 % interest in NetCo, a joint venture that owns the Net Force publishing franchise.

The Company accounts for its investment in

NetCo under the equity method and recognizes nominal royalties from this arrangement.

The Company assesses its investment in NetCo for

impairment on an annual basis.

following table represents the Company’s investment in NetCo:

SCHEDULE OF INVESTMENTS

Ended December 31,

Investment in NetCo, beginning

Allocation of net income from Netco

Distribution from NetCo

Investment in NetCo, ending

results of operations and financial position of the Company’s investment in NetCo are summarized below:

OF OPERATIONS AND FINANCIAL POSITION INVESTMENT

Ended December 31,

Condensed income statement information:

Net income (loss)

Company’s allocation

of net income from NetCo

of December 31,

Condensed balance sheet information:

Non-current assets

Current liabilities

Non-current liabilities

INTERNATIONAL CORP.

to Financial Statements

4— NOTES PAYABLE

April 12, 2021, the Company entered into a promissory note (the “Note”) with a related party (individual) for $ 100,000 .

Note accrued interest at 8 % per annum and matured on April 12, 2022 .

The proceeds of this Note were used to pay operating expenses of

the Company including directors and officer insurance premiums.

Interest expense accrued related this this Note was $ 5,752 for the year

ended December 31, 2021.

The Note and all accrued interest, totaling $ 6,752 , were paid in full on February 16, 2022.

May 2022, the Company entered into a finance agreement (the “Agreement”) with two individuals who are shareholders and directors,

which was amended in July 2022, to borrow up to $ 600,000 for working capital needs.

This Agreement provides for funding through January

31, 2024 and provides for interest at a rate of 8 % per annum through November 11, 2022, at which time the interest rate increased to

10 % per annum for subsequent advances.

The Agreement matures the earlier of January 31, 2024 or 20 months from the date of the first

funded amount unless the shareholders agree to extend the due date at that time.

The Company received advances of $ 280,000 pursuant to

this agreement through December 31, 2022.

December 31, 2022 and 2021 the Company had issued and outstanding 46,881,475 shares of its common stock, par value $ 0.01 per share.

of outstanding common stock are entitled to receive dividends when, as and if declared by the Board and to share ratably in the assets

of the Company legally available for distribution in the event of a liquidation, dissolution or winding up of the Company.

November 15, 2021, in a noncash transaction, the Company issued approximately 3,000,000 shares of common stock to existing holders of

subscription agreements dated June 2020.

These subscription agreements provided for the issuance of additional shares if certain contingent

assets were not realized.

It was determined during the year ended December 31, 2021 that the contingent asset would not be realized and

the shares were issued.

Summary Employee Option Information

Company’s stock option plans provide for the grant to officers, directors, third party contractors and other future key employees

of options to purchase shares of common stock.

The purchase price may be paid in cash or at the end of the option term, if the option

is “in-the-money”, it is automatically exercised “net”.

In a net exercise of an option, the Company does not

require a payment of the exercise price of the option from the optionee but reduces the number of shares of common stock issued upon

the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the

aggregate exercise price for the option shares covered by the option exercised.

Each option is exercisable to one share of the Company’s

common stock.

Most options expire within six years from the date of the grant and generally vest on the first anniversary date of their

Pursuant to the Equity Incentive Plan approved by the Company’s board of directors on November 12, 2018, an aggregate

of 5,400,000 options have been issued to directors and investor relations professionals.

INTERNATIONAL CORP.

to Financial Statements

Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective

years (all in weighted averages):

SCHEDULE OF FAIR VALUE OF OPTION USING VALUATION ASSUMPTIONS

Ended December 31,

Risk-free interest rate

Expected term, in years

Expected volatility

Expected dividend yield

Determined weighted average grant date fair value per option

expected term of the options represents an estimate of the length of time until the expected date of exercising the options.

granted have a maximum life of 7 years.

With respect to determining expected exercise behavior, the Company has grouped its option grants

into certain groups in order to track exercise behavior and establish historical rates.

The Company estimated volatility by considering

historical stock volatility over the expected term of the option.

The risk-free interest rates are based on the U.S.

Treasury yields

for a period consistent with the expected term.

The dividend yield of 0 % is based on the Company’s history and expectation of dividend

The Company has not paid and does not anticipate paying of dividends in the near future.

Summary Option Information

summary of the Company’s option plans as of December 31, 2022 and 2021, as well as changes during each of the years then ended,

is presented below:

SCHEDULE OF STOCK OPTION ACTIVITIES

Ended December 31,

Outstanding at beginning of year

Outstanding at end of

Exercisable at end of

compensation expense was approximately $ 283,000 and $ 273,000 in the years ending December 31, 2022 and 2021, respectively.

total compensation cost related to non-vested awards not yet recognized was approximately $ 13,000 as of December 31, 2022.

An award of 500,000 options granted on January 31, 2022 had special vesting provisions whereby the awards fully vested

outstanding as of December 31, 2021 were vested.

INTERNATIONAL CORP.

to Financial Statements

Company has issued warrants at exercise prices equal to or greater than market value of the Company’s common stock at the date

A summary of warrant activity follows:

OF WARRANTS ACTIVITY

Ended December 31,

Outstanding at beginning of year

Forfeited or expired

Outstanding at end of

warrants outstanding at December 31, 2022 have a weighted average remaining contractual life of approximately six months.

6— INCOME TAXES

the years ended December 31, 2022 and 2021, the Company incurred net operating losses and, accordingly, no provision for income taxes

has been recorded.

In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets.

At December 31, 2022 and 2021, the Company had approximately $ 61,000,000 and $ 118,000,000 , respectively, of net operating losses subject

to IRC Section 382 limitations, of which $ 6,400,000 and $ 6,200,000 , respectively, were available for carryforward after the consideration

of IRC Section 382 limitations.

State of Florida net operating losses available for carryforward approximate the federal net operating

loss carryforward amounts.

federal and state net operating losses expire beginning in 2021.

Approximately $ 55,000,000 and $ 25,000,000 , respectively of federal and

state losses expired in December 2022, and approximately $ 23,000,000 and $ 3,000,000 , respectively, of federal and state losses expired

in December 2021.

The Company has approximately $ 1,775,000 in federal and state losses that do not expire.

The remaining losses expire

from 2023 through 2036.

The majority of these expiring losses are further limited by IRC section 382 as shown in the deferred tax table

All such deferred tax assets have been offset with a full valuation allowance.

INTERNATIONAL CORP.

to Financial Statements

Company’s income tax provision differs from the expense that would result from applying statutory rates to income before taxes.

A reconciliation of the provision (benefit) for income taxes with amounts determined by applying the statutory U.S.

federal income tax

rate to income before income taxes is as follows:

OF INCOME BEFORE INCOME TAX

Ended December 31,

Computed tax at the federal statutory

$ ( 282,582 )

State income taxes, net of federal income tax

Foreign rate differential

Change in federal valuation

provision for income tax

income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial

reporting purposes and the amounts used for income tax purposes.

Deferred tax assets as of December 31, 2022 and 2021 consist of the

SCHEDULE OF DEFERRED TAX

of December 31,

Outside tax basis difference in

equity investments

Federal and state net operating loss carryforwards

available after consideration of IRC Section 382 limitations

General business credit

Stock compensation

Net operating losses

Research and development credit carried forward

Total deferred tax assets

Federal and state net operating loss carryforwards

subject to IRC Section 382 limitations

Less valuation allowance for net operating

loss limitations

( 15,465,570 )

( 28,425,763 )

Valuation allowance

( 2,971,573 )

( 2,482,298 )

Subtotal deferred tax assets

Deferred tax liability,

equity method basis difference

( 1,034,941 )

deferred tax assets

has evaluated all tax positions that could have a significant effect on the combined financial statements and determined the Companies

had no significant uncertain income tax positions at December 31, 2022 and 2021.

INTERNATIONAL CORP.

to Financial Statements

7— COMMITMENTS AND CONTINGENCIES

Company is the claimant in an arbitration proceeding against their 50 % partner in NetCo.

The Company initiated the arbitration proceeding

in an effort to maximize the total potential value to be derived from fully utilizing the NetCo intellectual property across publishing,

entertainment, digital media, merchandising and other ancillary markets.

Arbitration proceedings for the joint owners of NetCo concluded

during 2022 with final briefs being filed in January 2023.

The arbitrator has not rendered a decision as of the date of these financial

February 11, 2022, the Company entered into a nonrecourse litigation funding agreement (the “Agreement”) with Omni Bridgeway

(Fund 4) Invt.

(“Omni”) related to this arbitration proceeding.

The Agreement provides for Omni to fund all costs

related to the arbitration up to $ 1,000,000

in exchange for an assignment of a certain portion

of rights to and interest in claims related to this arbitration.

The agreement provides for specific calculations of the portion of any

claims collected to be received by Omni with the remainder collectible by the Company.

8 – RESTATEMENTS OF PREVIOUSLY ISSUED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

issued unaudited financial statements have been restated to reflect gains on dilution from the Company’s equity method

investment in NewStem.

The previously issued financial statements as of and for the three and six months ended June 30, 2022 and as

of and for the nine months ended September 30, 2022 contained an error whereby the Company did not recognize gains on the dilution

of its equity method investment in NewStem due to the issuance of stock to third parties.

following is a summary of the restatement:

OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS

Originally Reported

September 30, 2022

Originally Reported

Total current assets

Investment in NewStem, Ltd

Total current liabilities

Stockholders’ equity

of Operations:

Originally Reported

Nine Months Ended September 30, 2022

Originally Reported

Loss before income taxes

$ ( 270,283 )

Provision for income tax

Net loss before equity in net loss of equity method investees

Equity in net income (loss) of equity method investees

Balance Sheet:

Originally Reported

June 30, 2022

Originally Reported

Total current assets

Investment in NewStem, Ltd

Total current liabilities

Stockholders’ equity

Statements of Operations:

Originally Reported

Six Months Ended June 30, 2022

Originally Reported

Loss before income taxes

Provision for income tax

Net loss before equity in net loss of equity method investees

Equity in net income (loss) of equity method investees

Statements of Operations:

Originally Reported

Three Months Ended June 30, 2022

Originally Reported

Loss before income taxes

$ ( 229,982 )

Provision for income tax

Net loss before equity in net loss of equity method investees

Equity in net income (loss) of equity method investees

NOTE 9— SUBSEQUENT

Company evaluated subsequent events through the date these financial statements were available to be issued and filed with the SEC.

On March 23, 2023, the board

approved the grant of 360,000 stock options to directors and officers.

Third Amended and Restated Articles of Incorporation December 1999 (1)

Articles of Amendment to Articles of Incorporation 2004 (1)

Articles of Amendment to Articles of Incorporation 2018 (1)

Articles of Association of NewStem (1)

Equity Incentive Plan (1)

Joint Venture Agreement by and between the Company and NetCo (1)

Financing Agreement dated May 2022 (1)

Amendment to Financing Agreement dated July 2022 (1)

Promissory Note issued to Jan Loeb (1)

Promissory Note issued to Jerry Wolasky (1)

Form of NovelStem Subscription Agreement (1)

NewStem Share Purchase Agreement (1)

Redacted Litigation Funding Agreement with Omni Bridgeway (1)

Certification of Principal Executive Officer and Executive Chairman pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer and Executive Chairman pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Page Interactive Data File (embedded within the Inline XBRL document)

Financial statements of

fifty percent or less owned subsidiaries.

Financial Statements

As of December 31, 2022

Financial Statements as of December 31, 2022

Report of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Operations

Statements of Changes in Shareholders’ Equity

Statements of Cash Flows

Notes to the Financial Statements

Millennium Tower

Ha’arba’a Street, PO Box 609

Aviv 61006, Israel

of Independent Registered Public Accounting Firm

the Shareholders and the Board of Directors of NewStem Ltd.

on the Financial Statements

have audited the accompanying balance sheets of NewStem Ltd.

as of December 31, 2022 and 2021, the related statements of operations,

changes in shareholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2022, and the related

notes (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of

the years in the two-year period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and

the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

Firm of KPMG International

have served as the Company’s auditor since 2021.

Somekh Chaikin, an Israeli partnership and a member firm of the KPMG global organization of independent member firms affiliated with

KPMG International Limited, a private English company limited by guarantee

Sheets as of December 31,

US$ thousands

Current assets

Cash and cash equivalents

Prepaid share-based payment

Other current assets

Total current assets

Non-current assets

Property and equipment, net

Liabilities and shareholders’ equity

Current liabilities

Accounts payable

Other liabilities

Total Current liabilities

Non-current liabilities

Convertible financial instrument

Total liabilities

Commitments and contingent liabilities

Shareholders’ equity

Ordinary shares

Additional paid-in capital

Accumulated deficit

Total shareholders’ equity

Total liabilities and shareholders’ equity

Dilion Mashiah

of approval of the financial statements:

March 22, 2023.

* Represents an amount

less than $1 thousands.

accompanying notes are an integral part of the financial statements.

of Operations for the Year Ended December 31

US$ thousands

Operating expenses

Research and development expenses

Less – grants and participations received

Research and development expenses, net

General and administrative expenses

Operating loss

Financial (income) expenses, net

Loss for the year

accompanying notes are an integral part of the financial statements.

of Changes in Shareholders’ Equity

Ordinary shares

US$ thousands

Balance as of January 1, 2021

Issuance of ordinary shares in exchange

Issuance of ordinary shares in exchange of services

Stock based compensation

Loss for the year

Balance as of December 31, 2021

Issuance of ordinary shares, net

Stock based compensation

Loss for the year

Balance as of December 31, 2022

* Represents an amount

less than $1 thousands.

accompanying notes are an integral part of the financial statements.

of Cash Flows for the year ended December 31

US$ thousands

Cash flows from operating activities

Loss for the year

Adjustments required to reconcile loss to net cash used in operating

Revaluation of marketable securities

Revaluation of convertible financial instrument

Stock based compensation

Decrease (increase) in other current assets

Increase (decrease) in other liabilities

Increase (decrease) in accounts payable

Net cash used in operating activities

Cash flows from investing activities

Proceeds from the sale of marketable securities

Purchase of property and equipment

Net cash provided by investing activities

Cash flows from financing activities

Proceeds from a convertible financial instrument

Issuance of shares, net

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

accompanying notes are an integral part of the financial statements.

to the Financial Statements for the year ended December 31, 2022

NATURE OF OPERATIONS

(“the Company”) was incorporated in September 2016 under the laws of the

State of Israel and commenced its business operations in July 2018.

Company is a development stage company utilizing its pioneering intellectual property related

to haploid human embryonic stem cells for the development of personalized diagnostics and

therapeutics for genetic and epigenetic diseases.

inception, the Company has accumulated a deficit of $ 7,970 thousand.

Company will need to obtain additional funds to continue its operations.

Management’s plans with regard to these matters include

continued development, marketing and licensing of its products, as well as seeking additional financing arrangements.

Although management

continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from sales, licensing

or financing on terms acceptable to the Company.

The Company’s management has approved a contingent cost reductions in order to

adjust future operation expenses to its cash balance.

Following the fund-raising mentioned in Note 7D, and Note 12, and the Company’s

adjustment of its future operation expenses, the Company believes that its cash resources are sufficient for the operations of the next

these financial statements –

Company – NewStem Ltd.

Party – Within its meaning in ASC 850, “Related Party Transactions”.

2 - Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

significant accounting policies applied on a consistent basis are as follows:

Basis of Presentation

financial statements are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).

Presentation of financial information

currency of the primary economic environment in which the Company conducts its operations is the U.S.

The Company raises funds

in US dollars and manages its budget in US dollars.

Future revenues are also expected to be generated in US dollars.

Accordingly, the

Company uses the U.S.

dollar as its functional and reporting currency.

Use of estimates

preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions regarding transactions

or matters the final effect of which on the financial statements cannot be accurately determined at the time of their preparation.

though the estimates and assumptions are based on management’s best judgment, the final effect of such transactions or matters

may be different from the estimates and assumptions made in their respect.

applicable to these financial statements, the most significant estimates and assumptions relate to stock-based compensation.

to the Financial Statements for the year ended December 31, 2022

2 - Significant Accounting Policies (cont’d)

Cash and cash equivalents

and cash equivalents include short-term bank deposits with an original maturity not exceeding three months, that is not restricted for

and equipment

and equipment are stated at cost.

Depreciation is computed by using the straight-line method, over the assets’ estimated useful

annual depreciation rate for Software and Computers is 33 %.

of the depreciation method, useful life and residual value are reviewed at least at the end of each reporting year and adjusted as

assets held and used by the Company, are reviewed for impairment whenever events or changes in circumstance indicate that the carrying

amount of the assets may not be recoverable.

No such impairment was recorded in 2022 or 2021.

Concentrations

of credit risk

instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, and

marketable securities.

and cash equivalents are invested in a major bank in Israel.

Management believes that the financial institution that hold the Company’s

investments are financially sound and, accordingly, a minimal credit risk exists with respect to these investments.

Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging

arrangements.

to Section 14 of the Severance Compensation Law, 1963 (“Section 14”), the Company’s employees, covered by this section,

are entitled only to monthly deposits, at a rate of 8.33% of their monthly salary, made in their name with insurance companies and/or

pension funds.

Payments in accordance with Section 14 release the Company from any liability for future severance payments in respect

of those employees.

Deposits under Section 14 are not recorded as an asset in the Company’s balance sheet.

As of December 31, 2022

and 2021, all of the Company’s employees are included under Section 14.

Marketable securities

securities are recorded at fair value.

Changes in fair value of the securities are reported as financial income or expenses in the statement

of operations.

and development costs

and development expenses consist mainly of labor costs.

Costs are expensed as incurred.

grant received is presented as an offset from research and development expenses.

What changed 10-K

Item 9A. Controls and Procedures