Tix CORP - FORM 10-K - March 16, 2010

Attached files

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EX-23 - Tix CORP	v177339_ex23.htm
EX-21 - Tix CORP	v177339_ex21.htm
EX-32.2 - Tix CORP	v177339_ex32-2.htm
EX-31.1 - Tix CORP	v177339_ex31-1.htm
EX-31.2 - Tix CORP	v177339_ex31-2.htm
EX-32.1 - Tix CORP	v177339_ex32-1.htm
EX-10.43 - Tix CORP	v177339_ex10-43.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2009,

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 0-24592

Tix Corporation

(Exact name of registrant in its charter)

Delaware		95-4417467
(State or other jurisdiction of		(I.R.S. Employer Identification Number
incorporation or organization)

12001 Ventura Place, Suite 340,

Studio City, California 91604

(Address of principal executive offices, including zip code)

(818) 761-1002

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:		NASDAQ Capital Market
Common Stock $0.08 Par Value (Title of Class)		(Name of Exchange)

Securities registered pursuant to Section 12(g) of the Act:

None

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant is (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o ‪

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K. o

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the exchange Act. (Check one):

Large accelerated filer o		Accelerated filer x

Non-accelerated filer o		Smaller reporting companyo

The aggregate market value of the issuer’s common stock held by non-affiliates of the issuer as of June 30, 2009, based on the closing market price of $2.45 per share, was $50,225,858.

As of February 27, 2010, the issuer had 31,123,357, shares of common stock issued and outstanding, net of treasury shares.

Documents incorporated by reference: None.

TABLE OF CONTENTS

		Page
PART I
ITEM 1.	BUSINESS	3
ITEM 1A	RISK FACTORS	8
ITEM 1B	UNRESOLVED STAFF COMMENTS	12
ITEM 2.	PROPERTIES	12
ITEM 3.	LEGAL PROCEEDINGS	13
ITEM 4.	RESERVED	14

PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	15
ITEM 6.	SELECTED FINANCIAL DATA	17
ITEM 7	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	39
ITEM 8	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	39
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	39
ITEM 9A.	CONTROLS AND PROCEDURES	39
ITEM 9B.	OTHER INFORMATION	39

PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	40
ITEM 11	EXECUTIVE COMPENSATION	42
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	51
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	53
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	53
ITEM 15	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	54

SIGNATURES		54

PART I.

“Tix Corporation” (which may be referred to as “Tix”, the “Company”, “we”, “us” or “our”) means Tix Corporation and its subsidiaries, or one of our segments or subsidiaries, as the context requires.

Special Note about Forward-Looking Statements

Certain statements contained in this Form 10-K (or otherwise made by us or on our behalf from time to time in other reports, filings with the Securities and Exchange Commission, news releases conferences, internet postings or otherwise) that are not statement of historical facts constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, not withstanding that such statements are not specifically identified. Forward-looking statements include, but are not limited to statements about our financial position, business strategy, competitive position, potential growth opportunities, and potential operating performance improvements, the effects of competition, the effects of future legislation or regulations and plans and objectives or our management for future operations. We have based our forward looking statements on our beliefs and assumptions based on information available to us at the time the statements are made. Use of the words “anticipates”, “believes”, “expects”, “estimates” “intends”, “may”, “outlook”, “plans”, “potential”, “project”, “predict”, “should”, “will” or similar expressions that are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements may include, among others, statements concerning the Company's expectations regarding its business, growth prospects, revenue trends, operating costs, working capital requirements, facility expansion plans, competition, results of operations and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. The forward-looking statements in this Annual Report on Form 10-K for the fiscal year ended December 31, 2009 involve known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements of the Company to differ materially from those expressed in or implied by the forward-looking statements contained herein.

Each forward-looking statement should be read in context with, and with an understanding of, the various disclosures concerning the Company and its business made elsewhere in this Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as well as other public reports filed with the United States Securities and Exchange Commission. Investors should not place undue reliance on any forward-looking statement as a prediction of actual results or developments. Except as required by applicable law or regulation, the Company undertakes no obligation to update or revise any forward-looking statement contained in this Annual Report on Form 10-K for the fiscal year ended December 31, 2009, whether as a result of new information, future events or otherwise.

ITEM 1. BUSINESS

Tix Corporation is a diversified integrated entertainment company providing ticketing services, event merchandising, and the production and promotion of live entertainment. The Company was incorporated in the State of Delaware in April 1993. Its principal executive offices are located at 12001 Ventura Place, Suite 340, Studio City, California 91604. Its principal website is www.tixcorp.com. Tix Corporation is listed on The NASDAQ Capital Markets, trading under the symbol “TIXC.”

Our Business Strategy

Tix Corporation is an integrated entertainment company focusing on ticketing services, event merchandising, and the production and promotion of live entertainment. We operate three complementary business units: Tix4Tonight, Exhibit Merchandising (EM), and Tix Productions Inc. (TPI). TPI was formed by combining Magic Arts & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace), which were acquired at the beginning of 2008. Our broad strategic goals are to be the leading discount ticket and group ticket seller in the US, a leading exhibition and event merchandising company, and a major presenter and producer of live entertainment in the US and Canada. We are pursuing these strategic goals through both internal and external means. Internally we are looking at opportunities to enhance both revenue and operating income by increasing market share, focusing on internal cost control and streamlining our operating procedures. Externally we are looking for accretive growth opportunities through the acquisition of complementary businesses and exploitation of new and existing market opportunities. We are executing these strategies utilizing tactical approaches as outlined below:

Improve the profitability of our existing businesses.

Tix4Tonight, our Las Vegas last minute discount ticket operation, is working to increase market penetration and product offerings, such as our discount dinners program, called Tix4Dinners;

Tix4Tonight is expanding its premium ticket distribution offerings through inclusion of Tix Productions produced and presented events as well as third party events identified by TPI’s respected industry professionals;

Event Merchandising is increasing revenues by identifying new projects internally through Tix Productions and externally through add-on opportunities created from relationships with existing clients;

Tix Productions is expanding its live entertainment offerings through development of presenting relationships with new presenters, expanding its existing relationship with several major show producers, and more focused exploitation of internally produced shows.

Focus on acquiring and developing intellectual property. We are always seeking to expand the opportunities inherent in owning the creative content of live entertainment productions. Tix Productions is aggressively pursuing producing opportunities that can provide add-on opportunities across our complementary businesses of presenting, ticket distribution and merchandising. When we take an equity position in a touring production, we are sharing the financial risk of the tour with the other equity holders, which makes it easier to assure that we have complementary opportunities to present those shows in our markets, sell the merchandise, and handle discount and premium ticketing opportunities.

Extend our network of relationships with producers, promoters and venue managers. Recognizing the value inherent in strong relationships, TPI is pursuing promoting and producing opportunities with a group of leading producers and promoters of live entertainment and with leading venues in major markets in the US and Canada. In a difficult economic time, the multiple revenue streams that we can offer a producer allows for novel partnerships and deal-making, thus increasing our business opportunities.

In order to achieve our objectives and successfully implement our strategies, we have made and expect to continue to pursue investments and acquisitions that contribute to the above goals where the valuations, returns, and growth potential are consistent with our long-term goal of increasing shareholder value.

Our History

Prior to December 31, 2003, we were in an unrelated business. From January 2004 until March 2007, our principal business activity was the sale of tickets for Las Vegas shows at a discount from the original box office price on the day of the performance, through our wholly-owned subsidiary, Tix4Tonight, LLC (Tix4Tonight). In March 2007, we acquired the assets of John’s Tickets, LLC, which was a premium ticket reseller of live theatre, concerts and sporting events. In March 2010, Tix4Tonight acquired certain assets and assumed the responsibility of certain leases of All Access Entertainment, LLC (All Access). All Access was a competitor of Tix4Tonight in the Las Vegas last minute discount ticket market and operated five locations with the main location located in Circus-Circus. The acquisition of these assets and the assumption of the leases provide us with greater coverage of the Las Vegas area in which to sell our discount tickets. In August 2008, we acquired the assets of Exhibit Merchandising, LLC (Ohio). The assets of Exhibit Merchandising, LLC (Ohio) were assigned to Exhibit Merchandising, LLC (Nevada) (EM) which owns and operates complete turnkey retail stores that are leased in conjunction with the exhibits that they are supporting, stocked with commercially-available and extensive custom-branded products for sale in addition to professional management that complements the exhibition or theatrical production it represents. The major exhibit currently operated by EM is “Tutankhamun and The Golden Age of the Pharaohs.” EM has agreements to operate stores for three exhibitions in 2010. In January 2008, we acquired two live theatrical and concert production companies: Magic Arts & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace).

Our Business

We operate in three reportable segments: ticketing services, event and branded merchandising, and with our formation of Tix Productions, Inc. (TPI) in 2008, live entertainment.

Operating Segments

Ticketing Services

Our ticketing services are carried out by our wholly owned subsidiary Tix4Tonight, which offers for sale discount and premium tickets, and provides group sale services. Discounted tickets are sold byTix4Tonight, while premium tickets are offered through Tix4AnyEvent, and group sales are handled through Tix4Members.com. When selling last minute discounted tickets, Tix4Tonight sells them under short-term, exclusive and non-exclusive agreements with approximately 85 Las Vegas shows and attractions, out of a total of approximately 110 Las Vegas shows and attractions running at any one time. Tix4Tonight typically does not know exactly what shows it will be able to offer tickets for until the same day of the show. There are usually many more tickets available each day than are sold, although it is not uncommon for Tix4Tonight to sell out its supply of tickets for individual shows. The shows are paid on a weekly basis only for the tickets that Tix4Tonight actually sells to customers. Tix4Tonight has no financial risk with respect to unsold tickets and revenues are recorded at net of cost, that is, we record only the commissions and service fees as revenues.

We conduct the operations of Tix4Tonight at twelve leased locations in Las Vegas, Nevada:

The South Strip ticketing locations are at:

Tahiti Village at the southern end of the Las Vegas strip, south of McCarran International Airport (former All Access location);

Town Square Shopping Center near McCarran International Airport (opened December 2009);

Showcase Mall at the base of the world famous giant glass Coke bottle, across from New York, New York.

The Mid-South Strip ticketing location is at:

The Hawaiian Marketplace Shopping Center.

At the heart of the strip, our ticketing location is at:

Bill’s Gamblin Hall at the intersection of “Flamingo” and the “Strip”(opened November 2008).

The Mid-North Strip ticketing locations are at:

The Fashion Show Mall Strip entrance in front of Neiman-Marcus;

Casino Royale Hotel between the Venetian Hotel and Harrah’s Hotel.

North Strip ticketing locations are at:

Slots-A-Fun Casino (former All Access location);

Two locations in Circus Circus Hotel and Casino (both are former All Access locations);

10.

Blue booth in front of the Peppermill Restaurant between the Riviera Hotel and Denny’s;

Non-Strip ticketing locations are at:

11.

Downtown Fremont Street Experience is at the Four Queens Hotel;

12.

Tuscany Suites & Casino east of the Las Vegas Strip.

Tix4Tonight also maintains leased administrative offices for Tix4Tonight in Las Vegas, Nevada.

Effective March 14, 2007, we acquired substantially all the assets of John’s Tickets, LLC, an Ohio limited liability company dba Tix4AnyEvent (“AnyEvent”). AnyEvent is a national event ticket broker that sells premium tickets for sporting events, concerts, tours and theatre. AnyEvent operations are located in the administrative offices of Tix Corporation in Studio City, California.

Beginning August 10, 2006, as an adjunct to its Las Vegas show ticketing business, we launched our Tix4Dinner operations from the same leased locations as the sale of show tickets. Tix4Dinner offers reservations for discounted dinners at various restaurants on the Las Vegas strip, usually sold in conjunction with show tickets at T4T.

In February 2009, we launched our internet based ticketing operation, Tix4Members.com in conjunction with Costco Wholesale Corporation (Costco). However, revenues from the Costco arrangement were minimal. As a result, we terminated the Costco arrangement effective October 2009. The Company believes in this strategy of selling discount tickets to concerts, live theater, and sporting events to membership group members through co-branded websites, and continues to seek additional partners. As with our Tix4Tonight operation in Las Vegas, Tix4Members.com offers a marketing channel for producers, presenters, artists, arenas and theaters nationwide to take advantage of our strong position in the discount ticket sales and live entertainment industry. Tix4Members.com operates in a manner similar to Tix4Tonight with a few key differences. Instead of relying on physical ticket booth facilities for direct sales, Tix4Members uses the internet as its customer interface, and instead of offering only discounted day of show tickets, it has expanded the date range of its ticket availability of discount tickets to concerts, theatre shows and sporting events.

Because of the seasonal nature of tourism and convention attendance in Las Vegas, attendance patterns at Las Vegas shows may vary accordingly. The nature and degree of this seasonality varies among Las Vegas shows depending on the time of year, as well as the nature of entertainment alternatives available to audiences. Tix4Tonight’s revenues are more dependent on the type of shows being offered for sale than seasonality.

Exhibit and Event Merchandising

We provide exhibit and event merchandising through our wholly owned subsidiary Exhibit Merchandising, LLC Nevada (EM). EM provides retail specialty stores with branded merchandise for touring museum exhibitions and touring theatrical productions. EM owns and operates complete turnkey retail stores with commercially-available and extensive custom-branded products for sale. We operate the stores in spaces rented in conjunction with the exhibit. To date, revenues from the management of retail outlets associated with the sale of merchandise related to touring exhibits have been primarily derived from “Tutankhamun and The Golden Age of the Pharaohs” and “Tutankhamun the Golden King and the Great Pharaohs.”

EM offers exhibit and theatrical producers the opportunity for additional revenue streams without adding the retail expertise required to manage the operations, thereby leveraging the use of EM’s expertise and knowledge in the specialized retail world. Producers receive a royalty payment based upon gross sales that occur in each period with no other expense to the producer.

EM develops custom pieces that fit the specific exhibition branding in consultation with each event producer. EM strives to run an efficient operation, focused on providing superior customer service and quality products on the front end, and efficient management on the back end.

EM will be providing and operating the retail specialty stores for the next museum exhibition tour by Arts and Exhibitions International, LLC (AEI), a subsidiary of AEG, “Cleopatra: The Search for the Last Queen of Egypt”, when it makes its worldwide debut in Philadelphia at The Franklin Institute. The tour runs from June 5, 2010 to January 2, 2011, before moving on to four other cities that are currently scheduled.

Live Entertainment

In early 2008, we acquired two live theatrical and concert production companies: Magic Arts & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace). Magic and NewSpace were both independent presenters and producers of live theater and concerts with a history of working together. In May 2008, we combined the operations of these two entertainment companies into our newly-formed, wholly-owned subsidiary Tix Productions Inc. We believe that by combining the operations of these two companies into a single entity, we have been better able to leverage resources, gain operating efficiencies, and more fully utilize their combined experience with venues, producers and promoters. NewSpace and Magic continue to operate under their previous names as a reflection of the marketplace recognition of these entities.

As presenters, we generally contract for entertainment properties from producers to present in markets in the US and Canada. We have worked in most major North American cities and can negotiate terms that are unavailable to presenters in individual markets. In eleven markets, we have substantial subscriber-based operations operating as “Broadway in (city name)” series which greatly reduces the risk associated with individual presentations and provides additional opportunities to generate sponsorship and other ancillary revenue streams. These markets are Salt Lake City, Eugene, Kalamazoo, Akron, Albuquerque, Colorado Springs, Detroit, Fresno, Boise, Birmingham, and Milwaukee. In Canada, we have a presenting relationship that operates under the name Canada Theatricals Live which is now the second largest presenter of theater-based events in Canada. We use a wide variety of marketing channels to sell tickets to these programs including our Salt Lake City based group sales team, traditional marketing tools including print, radio, television, outdoor, internet-focused marketing tools, and internet social networking groups. In addition, we may invest in shows or productions in advance of their initial tours to obtain favorable presentation and merchandising rights.

Net revenues from live entertainment are a function of tickets sold times ticket prices plus ancillary revenue streams including sponsorships and revenues generated through premium ticketing opportunities. Expenses that would be characterized as Cost of Goods Sold include the guarantees, profit sharing and royalties paid directly to the touring productions, direct expenses of the theater which include staffing, rent and box office charges, marketing costs and production costs which include equipment rentals, stagehands and the cost of our production and settlement manager to attend the production. Live entertainment productions typically have substantial artist sharing relationships with the productions involved, and as a result, significant increases in presentation revenue do not typically result in comparable increases in operating income as much of that goes to the production or artist. On the other hand, significant decreases in presentation revenue do have a comparably large impact on operating income as the largest burden of risk in these presentations lies with the promoter.

The Company has invested in carious nonconsolidated affiliates that are primarily related to live shows. The Company owns a 40% interest in an LLC which was formed in 2009 to develop, produce and promote a traveling musical of Mr. Dodie Smith’s story “101 Dalmatians.” This investment is not consolidated, but is accounted for using the equity method of accounting, whereby the Company records its investments in these entities in the balance sheet as investments in nonconsolidated affiliates. The Company’s proportional interest in its operating results is recorded in the consolidated statement of operations and comprehensive loss as equity in losses of nonconsolidated affiliates.

Revenue Concentrations

During 2009, 47% of our Ticketing Service segment’s revenues were derived from two separate producers that we sell discount tickets for multiple shows, of which 32% was related to one producer and 15% was related to the other producer. The shows appear at different venues, hotels or theatres; however no single show, venue or theatre was greater than 10% of revenues. During the year ended December 31, 2008, 37% of our Ticketing Service segment’s revenues were derived from two producers of shows, of which 24% was related to one producer and 13% was related to the other producer. The multiple shows appeared at different venues, hotels or theaters; however, no single show, venue or theatre was greater than 10% of revenues. During the year ended December 31, 2007, there were no showrooms or other ticket sources which accounted for 10% or more of ticketing services revenues.

Substantially all of Exhibit Merchandising’s revenues since its acquisition on August 8, 2007 have been derived from the exhibits, “Tutankhamun and The Golden Age of the Pharaohs” and “Tutankhamun the Golden King and the Great Pharaohs.”

During 2009 and 2008, our Live Entertainment segment had several shows that were in excess of 10% of its revenues. In 2009, we had two shows that represented 39% of our Live Entertainment segment’s revenues, of which one show represented 28% of revenues and a second show represented 11% of revenues. In 2008, we had four shows that represented 45% of our Live Entertainment segment’s revenues with each show representing slightly more than 10% of revenues. At the end of 2009 and 2008, we owed one show approximately $2.8 million and $1.3 million, respectively.

Competition

The following is a discussion of the competitive landscape of each of our operating segments.

Ticketing Services

Tix4Tonight sells unsold tickets on the same day of the performance, generally at 25% to 50% off the box office price. Producers provide such tickets to the Company both on an exclusive and non-exclusive basis. Therefore, new ticket brokers can enter into competition with the Company to offer the same or similar ticketing services to non-exclusive shows and customers. Tix4Tonight, after its acquisition of All Access, currently has one stand-alone discount ticket competitor in the Las Vegas market and faces competition from venues and producers selling discount tickets direct to customers, and the possibility exists for other competitors to compete both there and in other markets targeted by the Company. Additionally, with the Company’s launch of its third ticketing platform, Tix4Members.com in 2009, the Company has entered the national group sales market. The first affiliate member group to launch was Costco Wholesale Corporation whose co-branded website operated from February 2009 until October 2009, at which time the Company elected to provide notice to terminate the agreement, as it resulted in minimal revenues. The Company believes in this strategy and continues to seek additional partners. As with our Tix4Tonight operation in Las Vegas, Tix4Members.com offers a marketing channel for producers, presenters, artists, arenas and theaters nationwide to take advantage of our strong position in the discounted ticket sales and live entertainment industry. Tix4Members.com operates in a manner similar to Tix4Tonight with a few key differences. Instead of relying on physical ticket booth facilities for direct sales, Tix4Members.com uses the internet as its customer interface, and has expanded the date range of ticket availability instead of offering only day of show tickets. Other competitors may possess longer operating histories, larger customer bases, longer relationships with producers, and significantly greater financial, technical, marketing, and public relations resources than the Company. Accordingly, we may not be able to compete successfully and competitive pressures may adversely affect our business, results of operations and financial condition.

Exhibit and Event Merchandising

Our main competitor is Event Network, whose business model is to manage smaller permanent location retail gift shops at museums, zoos, historical and other like attractions that are more of a permanent nature, with a small number of touring exhibits. We differ in our operations by focusing on large touring exhibitions with higher volume of sales. We believe our background and experience in the entertainment industry allows us to be able to react quickly to changes in schedules, volume of sales, and other business perspectives related to touring events and exhibitions. Further, our experience operating in foreign market places including Canada, Australia, United Kingdom and Austria, provide us significant opportunities.

Live Entertainment

Competition in the live entertainment industry is intense. We believe that we compete primarily on the basis of our ability to deliver quality entertainment products and enhanced revenues to promoters, producers and live entertainment venues. We are able to do this through our ability to provide complementary revenue opportunities in our markets, sell the merchandise, and handle discount and premium group sales ticketing opportunities. We believe that our primary strengths include:

The quality of service provided to the producer, promoter and venues.

Our management’s track record promoting and producing live entertainment events and tours both in the United States and internationally; and

The scope and effectiveness of our expertise in event marketing.

Although we believe that our entertainment products and services currently compete favorably with respect to such factors, we cannot provide any assurance that we can maintain our competitive position against current and potential competitors, especially those with significantly greater brand recognition, financial, marketing, service support, technical and other resources.

Our main competitors in the global theatrical industry include Nederlander Producing Company of America, Mirvish Productions, The Shubert Organization, The Walt Disney Company, Jujamcym Theatres in North America, Key Brands and Jam Productions. Some of the competitors in the theatrical industry have more Broadway show investments, from which most North America theatrical touring productions originate. In addition, these competitors may have significantly greater brand recognition and greater financial and other resources, which could enable them to strengthen their competitive positions in comparison to us.

Government Regulations:

From time to time, state and federal government bodies have proposed legislation that could have an effect on our business. For example, some legislatures have proposed laws in the past that would impose potential liability on us and other promoters and producers of live entertainment events for entertainment taxes and for incidents that occur at our events, particularly relating to drugs and alcohol.

Intellectual Property:

We create and own intellectual property. It is our practice to protect our trademarks, brands, copyrights, patents and other original and acquired works, ancillary goods and services. Our trademarks include, among others, “Tix4”, “Tix4Tonight”, “Tix4Dinners”, “Tix4Members.com”, “Tix4Members.net”, and through acquisition of Magic Arts and Entertainment, we acquired the “Broadway” theatrical rights to “101 Dalmatians.” Additionally, the United States Patent and Trademark Office has awarded and issued the Company a United States patent on a "Ticket Distribution System." The new patent covers a number of the key aspects of discount ticketing brokerage operations and technological systems related to the sale and distribution of unused tickets. We believe the patent broadly covers the way our Tix4Tonight subsidiary distributes discount tickets and encompasses our distribution methods. We believe that our patent, trademarks and other proprietary rights have significant value and are important to our brand-building efforts and the marketing of our services. We cannot predict however whether steps taken by us to protect our proprietary rights will be adequate to prevent misappropriation of these rights.

Insurance:

We maintain insurance coverage that we believe provides adequate coverage for all of our current operations. We maintain $1,000,000 of "key-man" life insurance on the life of Mitch Francis, our President and Chief Executive Officer, as to which we are the sole beneficiary.

Employees:

As of January 30, 2010, we had 172 employees. At Tix corporate operations, we had eleven full-time employees; 105 employees at our Las Vegas operations; 27 employees at Exhibit Merchandising, of which eleven were in San Francisco, California, three are at Norfolk, Virginia, and one in Toronto, Canada. Additionally we have two employees touring with our live theatrical productions. Tix Productions has 29 employees. Employees at the Las Vegas operation consist of both full-time and part-time employees. Our employees are not represented by any unions. We believe that our relations with our employees are satisfactory.

Available Information:

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are available without charge on our website, www.tixcorp.com, as soon as reasonably practicable after they are filed electronically with the SEC. We are providing the address to our Internet site solely for the information of investors. We do not intend the address to be an active link or to otherwise incorporate the contents of the website into the report.

Item 1A. RISK FACTORS

We are subject to various risks that may materially affect our business, financial condition and results of operations. An investor should carefully consider the risks and uncertainties described below and the other information in this filing before deciding to purchase the Company’s common stock. If any of these risks or uncertainties actually occurs, our business, financial condition or operating results could be materially harmed. In that case, the trading price of our common stock could decline and an investor could lose all or part of his investment.

WE MAY BE ADVERSELY AFFECTED BY A GENERAL DETERIORATION IN ECONOMIC CONDITIONS, WHICH COULD AFFECT CONSUMER AND CORPORATE SPENDING, AND THEREFORE SIGNIFICANTLY ADVERSELY IMPACT OUR OPERATING RESULTS.

Recent turmoil in the financial markets has adversely affected economic activity in the United States and other regions of the world in which we do business. The impact of slowdowns on our businesses is difficult to predict, but it may result in reductions in ticket sales and our ability to generate revenue. The risks associated with our businesses become more acute in periods of a slowing economy or recession, which may be accompanied by a decrease in attendance at events that we are involved in the ticket sales, merchandising, or production and promotion. There is evidence that this is affecting demand for some of our products and services, and a continued decline in economic activity could adversely affect demand for any of our businesses, thus reducing our revenue and earnings. A sustained decline in economic conditions could result in a decline in attendance at or reduction in the number of live entertainment events, which would have an adverse effect on our revenue and operating income.

Our business depends on discretionary consumer and corporate spending. Many factors related to discretionary consumer spending and corporate spending, including economic conditions affecting disposable consumer income such as employment, fuel prices, interest, tax rates and inflation, can significantly impact our operating results.

WE HAVE INCURRED NET LOSSES AND MAY EXPERIENCE FUTURE NET LOSSES.

Our operating results have been adversely affected by among other things, goodwill and intangible asset impairments and increased stock compensation expense related to obtaining access to the distribution rights of tickets to sporting, theatre and concert events. We incurred net losses of approximately $518,000, $34.7 million and $16.3 million in 2009, 2008, and 2007, respectively. We may face reduced demand for our entertainment offerings and other factors that could adversely affect our results of operations in the future. We cannot predict whether we will achieve profitability in future periods.

CHANGES IN OUR BUSINESS STRATEGY OR RESTRUCTURING OF OUR BUSINESSES MAY INCREASE OUR COSTS OR OTHERWISE AFFECT PROFITABILITY OF OUR BUSINESSES.

As changes to our business environment occur, we may need to adjust our business strategy to meet these changes, or we may otherwise find it necessary to restructure our operations or particular business assets. In addition, external events including acceptance of our theatrical offerings, our merchandise, and changes in macro-economic conditions may impair the value of our assets. When these changes or events occur, we may incur costs to change our business strategy and may need to write down the value of assets. We may also need to invest in businesses that have short-term returns that are negative or low, and whose ultimate business prospects are uncertain. In any of these events, our costs may increase, and we may have significant charges associated with the write-down of assets, or returns on new investments may be lower than prior to the change in strategy or restructuring.

CHANGES IN PUBLIC AND CONSUMER TASTES AND PREFERENCES FOR ENTERTAINMENT AND CONSUMER PRODUCTS COULD REDUCE DEMAND FOR OUR ENTERTAINMENT OFFERINGS AND PRODUCTS AND ADVERSELY AFFECT THE PROFITABILITY OF OUR BUSINESSES.

Our live entertainment and merchandising businesses create entertainment or consumer products whose success depends substantially on consumer tastes and preferences that change in often unpredictable ways. The success of our businesses depends on our ability to consistently create, purchase, present, promote, and distribute live entertainment and related consumer products that meet the changing preferences of the broad consumer market. Our live entertainment and merchandising businesses are dependent on our ability to successfully predict and adapt to changing consumer tastes and preferences inside the United States, as well as in foreign countries. Moreover, we must often invest substantial amounts in live productions before we learn the extent to which these shows will earn consumer acceptance. If our live entertainment offerings and products do not achieve sufficient consumer acceptance, our revenue from subscription series and touring shows and related consumer products may decline and adversely affect the profitability of one or more of our businesses.

OUR FUTURE CAPITAL NEEDS MAY NOT BE MET AND WE MAY BE FORCED TO ABANDON OR CURTAIL OUR BUSINESS PLANS.

Our growth and expansion could be impaired by limitations on our access to capital markets. We may require additional capital to continue to expand the operations of Tix4Tonight, Exhibit Merchandising, and our live entertainment subsidiary Tix Productions Inc. To the extent that we are unable to secure the capital necessary to fund our future growth on a timely basis and/or under acceptable terms and conditions, we may not have sufficient cash resources to continue to expand our operations. Additionally, if the market for entertainment offerings were to weaken for an extended period of time, our ability to raise capital would be substantially reduced. There can be no assurances that capital from outside sources will be available; and if such financing is available, it may involve issuing securities senior to the common stock or equity financings which would be dilutive to holders of common stock.

THERE IS A LIMITED PUBLIC MARKET FOR OUR COMMON STOCK AND THE COMPANY’S STOCKHOLDERS MAY BE UNABLE TO LIQUIDATE THEIR SHARES OR COULD BE SUBJECT TO EXTREME VOLATILITY.

Our common stock is listed on the The NASDAQ Capital Market and is quoted under the symbol “TIXC.” The NASDAQ Capital Market exists for securities of smaller, less-capitalized companies that do not qualify for inclusion in The NASDAQ National Market. There is limited volume of sales in our stock, thus providing limited liquidity into the market for the Company’s shares. As a result of the foregoing, stockholders may be unable to liquidate their shares or if a large volume of stock is being sold into the market at any one time, the price of our stock could rapidly decline.

LOSS OF OUR KEY PROMOTERS, MANAGEMENT AND OTHER PERSONNEL COULD RESULT IN THE LOSS OF KEY TOURS AND NEGATIVELY IMPACT OUR BUSINESS.

The entertainment industry is uniquely dependent upon personal relationships. As promoters and executives within the entertainment industry, we leverage our existing network of relationships with producers, promoters, and venue managers in order to secure the rights to distribute tickets, sell merchandise and secure the other resources that are critical to our success. Due to the importance of those industry contacts to our business, the loss of any of our producers, promoters, officers or other key personnel could adversely affect our operations. Although we have entered into long-term agreements with many of those individuals to protect our interests in those relationships, we can give no assurance that all or any of these key employees will remain with us or will retain their associations with key contacts.

OUR OPERATIONS ARE SUBJECT TO INTENSE COMPETITION AND COMPETITIVE PRESSURES THAT COULD ADVERSELY AFFECT THE COMPANY'S BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Our three business segments operate in highly competitive market environments and we may not be able to maintain or increase our current share of entertainment revenues. We compete in the ticketing services, exhibit and branded merchandising, and live entertainment segments of the entertainment industry. In addition, our competitors compete with us for key employees who have relationships with the artists, theatre managers, promoters and producers we rely upon. These competitors may engage in more extensive development efforts, undertake more extensive marketing campaigns, adopt more aggressive pricing policies, and make more attractive offers to theatre managers, producers and promoters with whom we presently have relationships. Our competitors may develop services, advertising strategies and opportunities with entertainment venues that are equal or superior to those we provide and/or utilize or that achieve greater market acceptance and brand recognition than we are able to achieve. Other variables that could adversely affect our financial performance by, among other things, leading to decreases in overall revenue, event attendance, ticket prices or profit margins include:

Unfavorable fluctuations in operating costs, including increased guarantees to producers, promoters and venues, which we may be unwilling or unable to pass through to our customers.

Our competitors may offer more favorable terms than we do in order to obtain agreements for new venues or to obtain events from venues they operate.

Other entertainment options available to our audiences may reduce our share of the overall entertainment market.

Competition in the specialized labor market we operate within may require us to spend more to retain key employees.

Unfavorable changes in the macro-economic environment may affect the ability of patrons to buy tickets and merchandise.

New competitors may enter our business segments as the barriers to entry are low.

We believe that barriers to entry into the business segments that we compete are low and that certain local ticket brokers, promoters and producers are increasingly expanding the geographic scope of their operations.

WE MAY BE UNABLE TO MANAGE GROWTH WHICH COULD ADVERSELY AFFECT OUR BUSINESS.

Successful implementation of the Company’s business strategy requires the Company to manage its growth. Growth could place an increasing strain on the Company’s management and financial resources. To manage growth effectively, the Company will need to establish definitive business strategies, goals and objectives, install and maintain a system of management controls, and attract and retain qualified personnel, as well as develop, train and manage management-level and other employees. If the Company fails to manage its growth effectively, the Company’s business, financial condition and/or operating results could be materially adversely affected, and the Company’s stock price may decline accordingly.

THE SUCCESS OF OUR TICKETING OPERATIONS DEPENDS IN PART ON THE INTEGRITY OF OUR SYSTEMS AND INFRASTRUCTURE. SYSTEM INTERRUPTION AND LACK OF INTEGRATION AND REDUNDANCY IN THESE SYSTEMS AND INFRASTRUCTURE MAY HAVE AN ADVERSE IMPACT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The success of our ticketing operations depends in part on our ability to maintain the integrity of our system and infrastructure, including websites, information and related systems, and distribution facilities. System interruption and the lack of integration and redundancy in the information systems and infrastructures of our ticketing operations may adversely affect our ability to process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations. We may experience occasional system interruptions that make some or all systems or data unavailable, or prevent us from efficiently providing services or fulfilling orders. We also rely on affiliate and third-party computer systems, broadband and other communications systems and service providers in connection with the provision of services generally, as well as to facilitate, process and fulfill transactions. Any interruptions, outages or delays in the systems and infrastructures of our business, our affiliates and/or third parties, or deterioration in the performance of these systems and infrastructures, could impair the ability of our business to provide services, fulfill orders and/or process transactions. Fire, flood, power loss, telecommunications failure, acts of war or terrorism, acts of God and similar events, or disruptions may damage or interrupt computer, broadband or other communications systems and infrastructures at any time. Any of these events could cause system interruption, delays and loss of critical data, and could prevent us from providing services, fulfilling orders and/or processing transactions. While we have backup systems for certain aspects of our operations, these systems are not fully redundant and disaster recovery planning is not sufficient for all eventualities. In addition, we may not have adequate insurance coverage to compensate for losses from a major interruption. If any of these adverse events were to occur, it could adversely affect our business, financial condition and results of operations.

THE PROCESSING, STORAGE, USE, AND DISCLOSURE OF PERSONAL DATA COULD GIVE RISE TO LIABILITIES AS A RESULT OF GOVERNMENTAL REGULATION, CONFLICTING LEGAL REQUIREMENTS OR DIFFERING VIEWS OF PERSONAL PRIVACY.

In the processing of consumer transactions, we receive, transmit and store a large volume of personally identifiable information and other user data. The sharing, use, disclosure and protection of this information are governed by the respective privacy and data security policies maintained by our business. Moreover, there are federal, state and international laws regarding privacy and the storing, sharing, use, disclosure and protection of personally identifiable information and user data. Specifically, personally identifiable information is increasingly subject to legislation and regulations in numerous jurisdictions around the world, the intent of which is to protect the privacy of personal information that is collected, processed and transmitted in or from the governing jurisdiction. We could be adversely affected if legislation or regulations are expanded to require changes in business practices or privacy policies, or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, financial condition and results of operations.

We may also become exposed to potential liabilities as a result of differing views on the privacy of the consumer and other user data collected by our business. The failure by us and/or the various third-party vendors and service providers with which we do business, to comply with applicable privacy policies or federal, state or similar international laws and regulations, or any compromise of security that results in the unauthorized release of personally identifiable information or other user data could damage the reputation of our business, discourage potential users from trying the products and services that we offer, and/or result in fines and/or proceedings by governmental agencies and/or consumers, one or all of which could adversely affect our business, financial condition and results of operations.

THE COMPANY DOES NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.

We have not declared or paid, and we do not anticipate declaring or paying in the foreseeable future, any cash dividends on our common stock. Our ability to pay dividends is dependent upon, among other things, our future earnings, if any, as well as our operating and financial condition, capital requirements, general business conditions and other pertinent factors. Furthermore, any payment of dividends by the Company is subject to the discretion of our board of directors. Accordingly, there is no assurance that any dividends will ever be paid on our common stock.

DOING BUSINESS IN FOREIGN COUNTRIES CREATES RISKS NOT FOUND IN DOING BUSINESS IN THE UNITED STATES.

Our international operations accounted for approximately 1% of our revenues in 2009 and are expected to account for between 5% and 10% of our revenues in 2010. The risks involved in foreign operations that could result in losses, which we are not insured against include:

exposure to local economic conditions;

potential adverse changes in diplomatic relationships with the United States of America;

risks of renegotiations or modifications of existing agreements with governmental authorities;

diminished ability to legally enforce our contractual rights in foreign countries;

withholding and other taxes on remittances and other payments by subsidiaries; and

changes in foreign taxation structures.

In addition, we may incur substantial tax liabilities when we repatriate any of the cash generated by our international operations back to the United States due to our current inability to recognize any foreign tax credits that would be associated with repatriation of the funds. We currently expect to repatriate substantially all of the cash generated by our international operations. We are not currently in a position to recognize any tax assets in the United States that are the results of payment of income taxes or withholding taxes in foreign jurisdictions.

WE MAY BE UNSUCCESSFUL IN OUR FUTURE ACQUISITIONS, IF ANY, WHICH MAY HAVE AN ADVERSE EFFECT ON OUR BUSINESSES.

Our future growth rate depends in part on our acquisitions of additional businesses. A significant portion of our recent and projected growth is expected to be growth attributable to acquisitions including Exhibit Merchandising, LLC, Magic Arts & Entertainment, LLC, and NewSpace Entertainment, Inc. We may be unable to identify suitable acquisition targets or make further acquisitions at favorable prices. If we identify a suitable acquisition candidate, our ability to successfully implement the acquisition would depend on a variety of factors, including our ability to obtain financing on acceptable terms and requisite government approvals. Acquisitions involve risks, including those associated with:

integrating the operations, financial reporting, technologies and personnel of acquired companies;

managing geographically dispersed operations;

the diversion of management’s attention from other business concerns;

the inherent risks in entering markets or lines of business in which we have limited or no direct experience; and

the potential loss of key employees, customers and strategic partners of acquired companies.

We may not successfully integrate any businesses or technologies we may acquire in the future and may not achieve anticipated revenue and cost benefits. Acquisitions may be expensive, time consuming and may strain our resources. Acquisitions may not be accretive to our earnings and may negatively impact our results of operation, as a result of, among other things, the incurrence of debt, one-time write-offs of goodwill and amortization expenses of intangible assets. In addition, future acquisitions that we may pursue could result in dilutive issuances of equity securities.

OUR EXISTING DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL SHAREHOLDERS HOLD A SUBSTANTIAL AMOUNT OF THE COMPANY’S COMMON STOCK AND MAY BE ABLE TO PREVENT OTHER STOCKHOLDERS FROM INFLUENCING SIGNIFICANT CORPORATE DECISIONS.

As of February 15, 2010, our directors and executive officers and principal shareholders beneficially owned or have the right to vote approximately 50% of our outstanding common stock. These stockholders, if they act together, will be able to direct the outcome of matters, including the election of our directors and other corporate actions, such as a merger with or into another company, a sale of substantially all of the Company’s assets, and amendments to the Company’s certificate of incorporation. The decisions of these stockholders may conflict with the Company’s interests or the interests of the Company’s other stockholders.

INCREASED COSTS ASSOCIATED WITH CORPORATE GOVERNANCE COMPLIANCE MAY SIGNIFICANTLY AFFECT OUR RESULTS OF OPERATIONS.

The Sarbanes-Oxley Act of 2002 and the Securities Exchange Act of 1934, as amended, requires compliance with the corporate governance and securities disclosure requirements, and requires an ongoing review of our internal control procedures. These requirements could make it more difficult for us to attract and retain qualified members of the board of directors, or qualified executives officers. In addition, director and officer liability insurance for public companies like us has become more difficult and more expensive to obtain, and we may be required to accept reduced coverage or incur higher costs to obtain coverage that is satisfactory to us and our officers and directors. We continue to evaluate and monitor regulatory developments and cannot estimate the timing and magnitude of additional costs we may incur as a result.

If in any year we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned and our stock price may suffer.

IF DETERIORATION OF THE ECONOMY CONTINUES, THIS COULD CAUSE ADDITIONAL FINANCIAL AND STOCK MARKET DECLINES, WHICH COULD LEAD TO REDUCED EARNINGS AND COULD RESULT IN FUTURE GOODWILL AND INTANGIBLE ASSET IMPAIRMENTS.

In the fourth quarter of fiscal year 2008, we recorded an impairment charge related to goodwill and intangible assets of $33.1 million related to our acquisition of EM. As of December 31, 2009, we have remaining goodwill and intangible assets related to our acquisitions of John’s Tickets, LLC, EM, Magic and NewSpace of $10.4 million. Factors we consider important that could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of the use of our assets or the strategy for our overall business, and significant negative industry or economic trends. If current economic conditions worsen causing decreased revenues and increased costs, we may have further goodwill impairments. For additional information, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Corporate Offices:

We lease office space at 12001 Ventura Place, Suite 340, Studio City, California 91604 as our corporate headquarters, pursuant to a lease for a period of five years expiring June 2010, with an option to extend the term of the lease for one additional five-year period.

Las Vegas Operations:

We conduct the operations of Tix4Tonight at twelve leased locations in Las Vegas, Nevada:

The South Strip ticketing locations are at:

Tahiti Village at the southern end of the Las Vegas strip, south of McCarran International Airport (former All Access location);

Town Square Shopping Center near McCarran International Airport (opened December 2009);

Showcase Mall at the base of the world famous giant glass Coke bottle, across from New York, New York.

The Mid-South Strip ticketing location is at:

The Hawaiian Marketplace Shopping Center.

At the heart of the strip, our ticketing location is at:

Bill’s Gamblin Hall at the intersection of “Flamingo” and the “Strip”(opened November 2008).

The Mid-North Strip ticketing locations are at:

The Fashion Show Mall Strip entrance in front of Neiman-Marcus;

Casino Royale Hotel between the Venetian Hotel and Harrah’s Hotel.

North Strip ticketing locations are at:

Slots-A-Fun Casino (former All Access location);

Two locations in Circus Circus Hotel and Casino (both are former All Access locations);

10.

Blue booth in front of the Peppermill Restaurant between the Riviera Hotel and Denny’s;

Non-Strip ticketing locations are at:

11.

Downtown Fremont Street Experience is at the Four Queens Hotel;

12.

Tuscany Suites & Casino east of the Las Vegas Strip.

Tix4Tonight also maintains administrative offices in Las Vegas, Nevada, pursuant to a lease that terminates on August 31, 2011, with an option to extend the term of the lease for one additional five-year period.

Exhibit Merchandising:

EM leases its administrative offices which it shares with Tix Productions and a warehouse facility in Streetsboro, Ohio under a non-cancelable operating lease. EM also leases additional storage space and housing at the locations of its exhibits, typically through the duration of the exhibit. Presently, we have leased additional retail space, storage space and housing in San Francisco, California; Norfolk, Virginia; Cairo, Egypt; and Toronto, Canada.

Live Entertainment:

Live Entertainment has two facilities: one facility houses the producing operations, while the other facility contains the subscription series operations. The producing operations leases a 782 square foot facility that expires in August 2011 and is connected to Exhibit Merchandising’s facility located in Streetsboro, Ohio. The subscription series offices are in Salt Lake City, Utah, pursuant to a lease that terminates on June 1, 2011, with an option to extend the term of the lease for one additional five-year period.

Minimum future rental payments:

The aggregate minimum future rental payments under non-cancelable operating leases for facilities in operation at December 31, 2009, excluding operating expenses, annual rent escalation provisions, and contingent rental payments based on achieving certain pre-determined sales levels, are as follows:

Years Ending December 31,
2010	$	3,506,000
2011		3,030,000
2012		2,582,000
2013		1,512,000
2014 and beyond		1,570,000
Total payments	$	12,200,000

Included in the minimum future rental payments above are the leases associated with the acquisition of All Access in March 2010.

ITEM 3. LEGAL PROCEEDINGS

As of December 31, 2009, the end of the period covered by this report, the Company was subject to various legal proceedings and claims discussed below, as well as certain other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. Other than as discussed below, in the opinion of management, the Company does not have a potential liability related to any current legal proceedings and claims that would individually or in the aggregate have a material adverse effect on its financial condition or operating results. However, the results of legal proceedings cannot be predicted with certainty. The Company intends to contest each lawsuit vigorously but should the Company fail to prevail in any of these legal matters or should several of these legal matters be resolved against the Company in the same reporting period, the operating results of a particular reporting period could be materially adversely affected. Management continues to evaluate the lawsuits discussed below and based on the stage of these proceedings, management is unable to reasonably estimate the likelihood of any loss or the amount or range of any potential loss that could result from the litigation. Therefore, no accrual has been established for any potential loss in connection with these lawsuits.

Vegas.Com Trademark Litigation

On October 23, 2009, the Company and Tix4Tonight filed a complaint against Vegas.com ("Vegas.com") and Vegas Tix4Less (“VT4L”) in the United States District Court for the Central District of California for federal trademark infringement, federal trade dress infringement and unfair competition, and common law unfair competition. Specifically, the complaint alleges that Vegas.com and VT4L are intentionally confusing consumers by using the Company's and Tix4Tonight's trademarks and trade dress. The complaint seeks damages, an injunction, declaratory relief, and attorneys' fees and costs. On December 4, 2009, Vegas.com and VT4L filed a motion to dismiss and/or transfer the litigation to Nevada, arguing that the court lacked personal jurisdiction over the defendants and that venue was either improper or inconvenient. The Company and Tix4Tonight filed its opposition on January 29, 2010 and the hearing on the motion is currently scheduled for March 15, 2010. To stop Vegas.com and VT4L's infringement during the pendency of the litigation, the Company and Tix4Tonight filed a motion for preliminary injunction on February 22, 2010. Vegas.com and VT4L have not yet responded to the preliminary injunction motion and the hearing is currently set for March 29, 2010.

Vegas.Com Antitrust Litigation

On December 14, 2009, Vegas.com and VT4L filed a complaint in the United States District Court for the District of Nevada alleging violations by the Company and its wholly owned subsidiary Tix4Tonight of 15 U.S.C. §1, 15 U.S.C. §2, 15 U.S.C. §14, and Nevada state law. The Complaint specifically alleges that the Company and Tix4Tonight entered into exclusive deals with venues and producers with the effect of unreasonably restricting trade and commerce, prevented actual and prospective competitors such as Vegas.com and VT4L from entering the market or obtaining a non-trivial share of the market, interfered with existing or prospective contractual arrangements between Vegas.com and VT4L and venues and producers, and asserted an invalid patent to prevent competition. In their demand, Vegas.com and VT4L seek compensatory, consequential, incidental, treble and punitive damages in an amount to be determined at trial, in addition to attorneys' fees and costs and injunctive relief. On December 23, 2009, Vegas.com and VT4L filed an Amended Complaint to add requests for declaratory judgment of non-infringement and invalidity related to the Company's ticket systems patent and also a claim for unfair trade practices under the Lanham Act related to the assertion of that patent. On February 3, 2010, Vegas.com and VT4L filed their Second Amended Complaint, to add allegations that the Company and Tix4tonight helped organize a group boycott among venues and producers against VT4L. The Company and Tix4Tonight's response to the Second Amended Complaint was filed on March 4, 2010.

ITEM 4. RESERVED

PART II.

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

(a) Market Information

Our common stock trades on the NASDAQ Capital Market under the symbol “TIXC”. The following table sets forth the high and low sale prices for our common stock for the periods indicated as reported by The NASDAQ Capital Market:

	Low		High
Fiscal Year Ended December 31, 2008:

Three Months Ended -
March 31, 2008	$	4.45	$	5.65
June 30, 2008	$	4.05	$	5.44
September 30, 2008	$	2.33	$	4.75
December 31, 2008	$	1.89	$	4.70

Fiscal Year Ended December 31, 2009:

Three Months Ended -
March 31, 2009	$	0.81	$	2.22
June 30, 2009	$	0.95	$	2.45
September 30, 2009	$	2.15	$	4.04
December 31, 2009	$	1.49	$	4.18

(b) Holders

As of December 31, 2009, we had 278 common shareholders of record, excluding 19,063,203 shares held in "street name" by brokerage firms and other nominees who hold shares for multiple investors. We estimate that we had approximately 1,700 beneficial common shareholders as of December 31, 2009.

Holders of common stock are entitled to receive dividends if, as and when declared by the Board of Directors out of funds legally available for distribution, subject to the dividend and liquidation rights of any preferred stock that may be issued and outstanding. We have not paid cash dividends on our common stock and have no present intention of paying cash dividends in the foreseeable future. It is the present policy of the Board of Directors to retain all earnings to provide for the future growth and development of our business operations.

(d) Repurchases of common stock

The following table sets forth the common shares repurchased during the quarter ended December 31, 2009:

2009 Repurchase Program
								Maximum number
					Total number of			of shares that may
					shares purchased as			yet be purchased
					part of publicly			under a publicly
	Total number of		Average price		announced plan or			announced plan or
Period	shares purchased		paid per share		program			program
October 2009		-	$	0.00		14,000			986,000
November 2009		56,103	$	2.57		70,103	(1)		929,897
December 2009		1,270,000	$	1.50		1,340,103			3,659,897
Q4 2009		1,326,103		1.55		1,340,103			3,659,897

Total		1,326,103	$	1.55		1,340,103			3,659,897

(1)	The Board of Directors of Tix Corporation on December 4, 2009 amended the Company’s share repurchase authorization from its originally authorized 1 million shares to 5 million shares.

Comparison of Cumulative Total Returns

The following line graph presentation compares cumulative total stockholder returns of Tix with The NASDAQ Stock Market Index and the NASDAQ Peer Index for the five-year period from December 31, 2004 to December 31, 2009. The graph and table assume that $100 was invested in each of Tix’s common stock, the NASDAQ Stock Market Index and the Peer Index on December 31, 2004. No dividends were paid during the measurement period. This data was furnished by Zacks Investment Research, Inc. Copyright© 2008, NASDAQ, Inc. All rights reserved. Used with permission.

Comparison of 5 Year Cumulative Total Return

Assumes Initial Investment of $100

December 2009

Equity Compensation Plan

The securities authorized for issuance under the Company's equity compensation plans at December 31, 2009 are summarized as follows:

	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))

Plan Category
Equity compensation plans approved by our security holders
2009 Equity incentive plan		365,000	$	6.63		2,635,000
2004 Directors stock option plan		170,000		2.18		830,000
2004 Stock option plan		716,000		5.26		144,000
2003 Consultant stock plan		-		-		409,243
Subtotal		1,251,000	$	3.71		4,018,243
Equity compensation plans not approved by security holders
Outstanding warrants (1)		950,000	$	3.70		N/A

Total		2,201,000	$	3.71		4,018,243

(1)

The warrants shown were issued from time to time as compensation for services rendered by consultants, advisors or other third parties, and do not include warrants sold in private placement transactions. The material terms of such warrants were determined based upon arm’s-length negotiations with the service providers. The warrant exercise prices approximated the market price of our common stock at or about the date of grant, and the warrant terms range from five to ten years from the grant date. The warrants contain customary anti-dilution adjustments in the event of a stock split, reverse stock split, reclassification or combination of our outstanding common stock and similar events. Certain warrants contain anti-dilution adjustments triggered by other corporate events, such as dividends and sales of equity below market price.

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data is derived from our audited financial statements. Our financial statements for 2009, 2008, 2007, 2006, and 2005 have been audited by Weinberg & Company, P.A., our independent registered public accounting firm. These historical results do not necessarily indicate future results. When you read this data, it is important that you also read our financial statements and related notes, as well as the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of this Annual Report. Financial information provided below has been rounded to the nearest thousand.

	Year Ended December 31, (1)
	2009			2008			2007			2006			2005
Results of Operations Data:
Revenue	$	81,791,000		$	69,545,000		$	18,567,000		$	5,388,000		$	2,695,000
Operating Expenses:
Direct operating expenses		60,901,000			48,752,000			11,672,000			2,173,000			1,510,000
Selling and marketing expense		2,520,000			3,008,000			13,475,000	(4)		467,000			326,000
General and administrative expenses		14,031,000			14,931,000			8,117,000			3,306,000			1,907,000
Impairment of goodwill		-			25,445,000	(2)		-			-			-
Impairment of intangible assets		-			7,687,000	(2)		-			-			-
Depreciation and amortization		2,496,000			4,601,000			1,668,000			164,000			109,000
Operating income (loss)		1,843,000			(34,879,000	)		(16,365,000	)		(722,000	)		(1,157,000	)
Equity in losses of nonconsolidated affiliates		(2,644,000	) (5)		-			-			-			-
Interest expense		(13,000	)		(19,000	)		(104,000	)		(329,000	)		(677,000	)
Interest income		40,000			59,000			96,000			15,000			-
Gain on settlement of debt, net		-			-			-			1,033,000	(3)		-
Other income		296,000			175,000			28,000			37,000			68,000

Income (loss) from continuing operations		(478,000	)		(34,664,000	)		(16,345,000	)		34,000			(1,766,000	)
Income from discontinued operations		-			-			-			5,000			743,000
Income tax expense		40,000			-			-			-			-
Net income (loss)		(518,000	)		(34,664,000	)		(16,345,000	)		39,000			(1,023,000	)
Other comprehensive income (loss):
Foreign currency translation adjustments		36,000			(29,000	)		-			-			-
Comprehensive income (loss)	$	(482,000	)	$	(34,693,000	)	$	(16,345,000	)	$	39,000		$	(1,023,000	)

Basic net income (loss) per common share:
From continuing operations	$	(0.02	)	$	(1.09	)	$	(0.70	)	$	-		$	(0.17	)
From discontinued operations		-			-			-			-			0.07
Combined net income (loss) per common share- basic	$	(0.02	)	$	(1.09	)	$	(0.70	)	$	-		$	(0.10	)
Diluted net income (loss) per common share:
From continuing operations	$	(0.02	)	$	(1.09	)	$	(0.70	)	$	-		$	(0.17	)
From discontinued operations		-			-			-			-			0.07
Combined net income (loss) per common share-diluted	$	(0.02	)	$	(1.09	)	$	(0.70	)	$	-		$	(0.10	)

	Year Ended December 31, (1), (2)
	2009			2008			2007			2006			2005
Balance Sheet Data:
Total assets	$	29,562,000		$	28,848,000		$	55,168,000		$	2,632,000		$	1,042,000
Long-term debt; including current maturities		-			-			-			-			1,379,000
Shareholders' equity (deficiency)	$	21,128,000		$	22,197,000		$	51,746,000		$	378,000		$	(2,400,000	)

Acquisitions significantly impact the comparability of the historical consolidated financial data reflected in the schedule of Selected Financial Data. The following is a list of acquisitions that we have made in the last five years and the effective date of each acquisition:

·	John’s Tickets, LLC	March 14, 2007

·	Exhibit Merchandising, LLC	August 7, 2007

·	NewSpace Entertainment, Inc.	January 2, 2008

·	Magic Arts & Entertainment, LLC	January 2, 2008

The Company performed its 2008 annual impairment testing of goodwill and intangibles as of December 31, 2008. Based on a combination of factors, including the economic environment, decreased revenues and increased decline in margins, management determined that an impairment of goodwill and intangible assets had occurred, thus recording impairment charges to goodwill and intangible assets of $25.4 million and $7.7 million, respectively. There were no impairments of goodwill or intangible assets in 2009 and 2007, or in years prior to 2007.

On September 13, 2006, the Company repaid in full its obligation to the lender of $1,180,000 (including accrued interest of $298,000) by making a final payment of $101,000. As a result, the Company recognized a non-cash gain on settlement of debt of $1,079,000 during the year ended December 31, 2006. Netted against the gain on settlement of debt is $58,000 of deferred offering costs and an additional $12,000 gain from a separate settlement with other lenders.

	4.	During the year ended December 31, 2007, the Company issued its common stock and warrants to purchase its common stock to outside consultants as compensation for services provided that had a fair market value of $10.9 million at the time of grant. These services were primarily attributable to our efforts to enter into strategic alliances with producers, presenters and venues. The Selected Financial Data should be read in conjunction with Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The Company in 2008 acquired the rights from the estate of Dodie Smith to develop, promote and tour the production “101 Dalmatians the Musical,” for $400,000. These rights were estimated to have a seven year life. Separately, the company invested $2.2 million, resulting in a 40% interest in the limited liability company that was formed to produce, promote and tour “101 Dalmatians the Musical.” Further, as part of an amendment to the original rights with the estate of Dodie Smith, future rights to the show “101 Dalmatians the Musical” would vest for a twenty-four year period once the show was performed sixteen times in New York. In addition, the Company advanced $820,000 to the limited liability company during the development period of the show, of which $766,000 remains outstanding. The advance earns interest at 15% per annum and is expected to be repaid from the projected future licensing revenues of the show over a four year or five year period.

The touring event associated with the affiliate is expected to end in June 2010, which includes a sixteen performance run in New York. During 2009, the Company’s share of losses from the tour including advertising costs that were expensed when incurred or first performed was $1.3 million. In addition, the Company has recorded a $1.3 million charge to write off its investment and the estimated expenses related to its proportionate share of losses that are expected to be incurred in 2010 to secure the future rights to the show. The rights to the show will be extended significantly to 24 years if the show has a minimum run on Broadway. The remaining balance of the note receivable and the intangible asset totaling $1,052,000 related to the show are to be recovered from show royalties. The Company expects future recoveries from royalties will exceed the note and intangible values.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Please read the following discussion of our financial condition and results of operations together with the audited consolidated financial statements and notes to the financial statements included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future economic results. Our actual results could differ materially from the results contemplated by these forward looking statements due to a number of factors, including those discussed under Item 1A. Risk Factors and other sections of this Annual Report.

During 2009, we continued to execute our strategy to improve and build our operations comprised of Tix4Tonight, Exhibit Merchandising (EM), and Tix Productions Inc. (TPI). The key developments for each of our segments for 2009 were:

Tix4Tonight

For the year ended December 31, 2009, the value of the discount tickets sold increased by $23.8 million or 44% to $77.7 million.

For the year ended December 31, 2009, the number of the discount tickets sold increased by 307,000 tickets or 29% to 1,366,000 tickets.

For the year ended December 31, 2009, the number of dinner reservations sold increased by 110,000 or 42% to 371,000 dinner reservations.

In September and December, we opened our seventh and eighth leased ticket locations in Las Vegas. The ticket booths are located at Casino Royale on the Las Vegas Strip, between the Venetian Hotel and Harrah’s Hotel and at the Town Square Shopping Center near McCarran International Airport.

Exhibit Merchandising

Was profitable for the year ended December 31, 2009.

	·	Negotiated a royalty agreement with exhibition producers reducing our royalty rate by 25%, which we estimate is a savings of $30,000 per month.

EM will be providing and operating the retail specialty stores for the next museum exhibition tour by Arts and Exhibitions International, LLC (AEI), a subsidiary of AEG, “Cleopatra: The Search for the Last Queen of Egypt”, when it makes its worldwide debut in Philadelphia at The Franklin Institute, and runs from June 5, 2010 to January 2, 2011, before moving on to four other cities that are currently scheduled.

Live Entertainment

TPI’s subscription series shows are presently selling slower than anticipated; however, offsetting the decline in revenues from our subscription series are stronger than anticipated sales of shows such as Walking with Dinosaurs.

Shows that are produced or presented by TPI such as David Copperfield, Rain, and Lord of the Dance continue to perform in line with expectations.

TPI invested in live shows such as “101 Dalmatians, The Musical”, which debuted in Minneapolis in October 2009.

Basis of Presentation

The consolidated financial statements include the accounts of Tix together with those of its wholly-owned subsidiaries, Tix4Tonight, EM, and TPI. Investments in business entities the Company does not control, but has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method and the Company’s proportionate share of the income or loss is recorded as a single line item in the income statement, “Equity in losses of nonconsolidated affiliates”, an example of this is “101 Dalmatians, the Musical.” All intercompany transactions and accounts have been eliminated in consolidation.

Segment Overview

Ticketing Services

Our ticketing services are carried out by our wholly owned subsidiary Tix4Tonight. Tix4Tonight offers both the sale of discount and premium tickets to live shows and events, and provides membership group sales services. Additionally, Tix4Tonight also offers discounts on meals. Tix4Tonight sells its offerings from thirteen leased locations in Las Vegas, Nevada. Through these same thirteen leased locations, Tix4Tonight also sells discount dinner reservations to various restaurants through Tix4Dinners.

Tix4Tonight also sells premium tickets through Tix4AnyEvent (AnyEvent). AnyEvent is a national event ticket broker that sells premium tickets for sporting events, concerts, tours and theatre. AnyEvent operations are located in the leased administrative offices of Tix Corporation in Studio City, California.

In December 2008, Tix4Tonight announced its new ticket distribution channel Tix4Members.com (Tix4Members). Tix4Members sells discount tickets to concerts, live theater and sporting events to membership group members through co-branded websites. To this end Tix4Tonight entered into an agreement to provide Costco Wholesale Corporation (Costco) members with event and ticketing services. In February 2009, Tix4Members launched its first co-branded discount website with Costco Event Ticket Services; however, revenues from the Costco arrangement were minimal. As a result, we terminated the Costco arrangement effective October 2009. The Company believes in this strategy of selling discount tickets to concerts, live theater and sporting events to members of membership groups through co-branded websites and continues to seek additional partners. As with our Tix4Tonight operation in Las Vegas, Tix4Members.com offers a marketing channel for producers, presenters, artists, arenas and theaters nationwide to take advantage of our strong position in the discounted ticket sales and live entertainment industry. Tix4Members.com operates in a manner similar to Tix4Tonight with a few key differences. Instead of relying on physical ticket booth facilities for direct sales, Tix4Members uses the internet as its customer interface, and instead of offering only discounted day of show tickets, it has expanded the date range of its ticket availability of discount tickets to concerts, theatre shows and sporting events. Tix4Members is currently looking at partnering opportunities.

The Company also maintains leased administrative offices for Tix4Tonight in Las Vegas, Nevada.

See further discussion of our Ticketing Services segment in Item 1. Business - Operating Segments.

Exhibit and Event Merchandising

The Company provides exhibit and event merchandising services through its wholly owned subsidiary Exhibit Merchandising LLC (EM). EM provides a complete turnkey retail store with commercially-available and extensive custom-branded product for touring museum exhibitions and touring theatrical productions.

See further discussion of our Exhibit and Event Merchandising segment in Item 1. Business - Operating Segments.

Live Entertainment

In January 2008, the Company acquired two live theatrical and concert production companies: Magic Arts & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace). Both Magic and NewSpace were independent presenters and producers of live theater and concerts with a history of working together. The Company combined the operations of Magic and NewSpace to form its wholly-owned subsidiary Tix Productions Inc. We believe the combination of the two companies has allowed us to better leverage our resources, gain operating efficiencies, and more fully utilize the combined network of producers and promoters. NewSpace and Magic will continue to operate under their current names for the foreseeable future as a reflection of the marketplace recognition of these entities.

See further discussion of our Live Entertainment segment in Item 1. Business - Operating Segments.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements is in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.

The following narrative describes the critical accounting policies that affect the more significant judgments and estimates used in the preparation of the Company's consolidated financial statements.

Revenue Recognition and Presentation

The Company has several streams of income, each of which is required under Generally Accepted Accounting Principles (GAAP) to be recognized in varying ways. The following is a summary of our revenue recognition policies:

The Company’s Las Vegas discount show ticketing business recognizes as revenue the commissions and related transaction fees earned from the sale of Las Vegas show tickets at the time the tickets are paid for by and delivered to the customers. The Company’s commissions are calculated based on the face value of the show tickets sold. The Company’s transaction fees are charged on a per-ticket basis. With certain exceptions, ticket sales are generally non-refundable, although same-day exchanges of previously sold tickets are permitted. Claims for ticket refunds, which are generally received and paid the day after the show date, are charged back to the respective shows and are recorded as a reduction to the Company’s commissions and fees at the time that such refunds are processed. The Company does not have accounts receivable associated with its sales transactions, as payment is collected at the time of sale.

The Company’s Tix4Members.com recognizes as revenues the commissions and related transaction fees from the sale of tickets when the related event has occurred. Refunds are only issued if the event is canceled or postponed. Payments for such ticket sales received prior to the event are recorded as deferred revenue. Claims for ticket refunds, which will be generally received and paid the day after the show date, are charged back to the respective shows and recorded as a reduction to the Company’s commissions and fees at the time that such refunds are processed. Tix4Members does not have any accounts receivable associated with sales transactions to individual customers because payment is collected at the time of sale.

Tix4Dinner offers reservations for discounted dinners at various restaurants surrounding the Las Vegas strip and downtown, with dining at specific times on the same day or in some cases the day after the sale. Tix4Dinner recognizes as revenue the transaction fees earned from the purchaser of the dinner reservations at the time the reservations are made and a subsequent nominal fee from the restaurant at the time the reservation is used. At this time, the Company has immaterial amounts of accounts receivable and does not have any accounts payable associated with the Tix4Dinner operations, as the Company collects the transaction fee at the time that the reservation is made, and the dinner payment is collected directly by the restaurant.

AnyEvent recognizes as revenue the gross amount of ticket sales from the sale of its ticket inventory. AnyEvent bears the risk of economic loss if the tickets are not sold by the date that the event occurs. Revenue is considered earned when the related event has occurred. Refunds are only issued if the event is canceled or postponed. Payments for such ticket sales received prior to the event are recorded as deferred revenue. AnyEvent does not have any accounts receivable associated with sales transactions to individual customers, as payment is collected at the time of sale. However, sales transactions with other ticket brokers may be conducted on a credit basis, which would generate accounts receivable.

Exhibit Merchandising recognizes retail store sales at the time the customer takes possession of the merchandise. Sales are recorded net of discounts and returns, and exclude sales tax. Discounts are estimated based on historical experience. For online sales, revenue is recognized free on board ("FOB") origin where title and risk of loss pass to the buyer when the merchandise leaves the Company's distribution facility at the time of shipment, which we refer to as the date of purchase by the customer. Sales are recognized net of merchandise returns, which are reserved for based on historical experience. Shipping and handling revenues from sales are included as a component of net sales. Conversely, shipping and handling costs are a component of direct cost of revenues. The Company does not have any accounts receivable associated with this business, as all transactions are done by cash or credit card.

On January 2, 2008, the Company began its live entertainment business. Revenue from the presentation and production of an event is recognized after the performance occurs. Revenue from our producing and presenting activities are reported in accordance with the authoritative guidance issued by the Financial Accounting Standards Board, which advises that the following items are indicators as to whether something should be recorded at gross or net:

Acts as principal in the transaction

Has risk and rewards of ownership, such as risk of loss for collection, delivery and returns, and

Takes title to the products

Selects the supplier

Flexibility in pricing

Assumes credit risk

Acts as an agent or broker (including performing services, in substance, as an agent or broker) with compensation on a commission or fee basis. If the Company performs as an agent or broker without assuming the risks and rewards of ownership of the goods, sales should be reported on a net basis.

TPI’s operating units, Magic Arts & Entertainment and NewSpace, act as both presenter and promoters of productions, as well as agent. TPI’s revenues from live entertainment where it is acting as the producer or promoter are a function of a number of elements; revenue is a direct reflection of tickets sold times ticket prices plus ancillary revenue streams including sponsorships and revenues generated through premium ticketing opportunities. In instances where the Company acts as the presenter or promoter, it:

selects the suppliers or approves the selection of the supplier,

is the primary obligor with suppliers,

assumes credit risk,

directs the pricing of the tickets, and

purchases the advertising.

The above are indicators of ownership and would be evidence that revenues and related expenses should be recorded at gross. As the Company is acting as the principal in the transaction, i.e., it has the risks and rewards of ownership and has recorded the related revenues and expenses at gross. In other instances where we only receive a fee and are not the principal obligors to vendors, we record these revenues at net.

TPI revenue collected in advance of the event is recorded as deferred revenue until the event occurs. Revenue collected from sponsorship and other revenue, which is not related to any single event, is classified as deferred revenue and generally amortized over the tour’s season or the term of the contract. We account for taxes that are externally imposed on revenue producing transactions on a net basis, as a reduction to revenue.

Stock-Based Compensation

Our share-based employee compensation plans are described in Note 10 of the Notes to our Financial Statements. The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee share-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total share-based compensation charge is recorded in the period of the measurement date.

The fair value of Tix’s common stock option grant is estimated using the Black-Scholes option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes option pricing model, and based on actual experience. The assumptions used in the Black-Scholes option pricing model could materially affect compensation expense recorded in future periods.

Impairment of Long-Lived Assets, Goodwill and Intangible Assets

We review long-lived assets whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable in accordance with the authoritative guidance provided by the Financial Accounting Standards Board. Our long-lived assets, such as property and equipment, are reviewed for impairment when events and circumstances indicate that depreciable or amortizable long lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current value.

We use various assumptions in determining the current fair value of these assets, including future expected cash flows and discount rates, as well as other fair value measurements. Our impairment loss calculations require us to apply judgment in estimating future cash flows, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows.

If actual results are not consistent with our assumptions and judgments used in estimating future cash flows and asset fair values, we may be exposed to future impairment losses that could be material to our results.

Valuation of Intangible Assets

The Company has acquired and continues to acquire significant intangible assets that Tix records at fair value. The authoritative guidance provided by the Financial Accounting Standards Board requires Tix to make assumptions regarding inputs into the discounted cash flow model about the timing and amount of future net cash flows, risk, cost of capital, terminal values and market participants. Each of these factors can significantly affect the value of the intangible asset. Tix engages independent valuation experts who review Tix's critical assumptions and calculations for acquisitions of significant intangibles. Tix’s management reviews intangible assets for impairment annually using an undiscounted net cash flows approach. If the undiscounted cash flows of an intangible asset are less than the carrying value of an intangible asset, the intangible asset is written down to its fair value, which is usually the discounted cash flow amount. Where cash flows cannot be identified for an individual asset, the review is applied at the lowest group level for which cash flows are identifiable. Goodwill and intangible assets are reviewed for impairment annually or when an event that could result in an impairment of goodwill occurs. At December 31, 2009, goodwill and intangibles amounted to $5.9 million and $4.5 million, respectively, and amortization expense for intangible assets amounted to $2.0 million in 2009. During 2008, Tix recorded impairment charges to goodwill and intangible assets of $25.4 million and $7.7 million, respectively. There were no impairments of goodwill in 2009 or 2007. Once an impairment of goodwill or other intangible assets has been recorded, it cannot be reversed. There can be no assurance that future goodwill impairments will not occur.

Inventory Valuation

Inventories are stated at the lower of cost or market. Market is defined as current replacement cost, except that market should not exceed the net realizable value and should not be less than net realizable value reduced by an allowance for an approximately normal profit margin. The cost of inventories is determined by using the first-in, first-out method. We perform a monthly analysis of our inventory balances to determine if the carrying amount of inventories exceeds their net realizable value. Our determination of estimated net realizable value is based on customer orders, market trends and historical pricing. If the carrying amount exceeds the estimated net realizable value, the carrying amount is reduced to the estimated net realizable value. We estimate a reserve for obsolescence and excess of our supplies inventory. Inventory is stated net of the reserve.

Recent Accounting Pronouncements

References to the “FASB”, “SFAS” and “SAB” herein refer to the “Financial Accounting Standards Board”, “Statement of Financial Accounting Standards”, and the “SEC Staff Accounting Bulletin”, respectively.

In October 2009, the FASB issued authoritative guidance on revenue recognition that will become effective for the Company beginning July 1, 2010, with earlier adoption permitted. Under the new guidance on arrangements that include software elements, tangible products that have software components that are essential to the functionality of the tangible product will no longer be within the scope of the software revenue recognition guidance, and software-enabled products will now be subject to other relevant revenue recognition guidance. We believe adoption of this new guidance will not have a material impact on our financial statements.

On July 1, 2009, the Company adopted authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) on business combinations. The guidance retains the fundamental requirements that the acquisition method of accounting (previously referred to as the purchase method of accounting) be used for all business combinations, but requires a number of changes, including changes in the way assets and liabilities are recognized and measured as a result of business combinations. It also requires the capitalization of in-process research and development at fair value and requires the expensing of acquisition-related costs as incurred. We have applied this guidance to business combinations completed since July 1, 2009. Adoption of the new guidance did not have a material impact on our financial statements.

In June 2009, the FASB amended its guidance on accounting for variable interest entities ("VIE"). Among other things, the new guidance requires a qualitative rather than a quantitative analysis to determine the primary beneficiary of a VIE; requires continuous assessments of whether an enterprise is the primary beneficiary of a VIE; enhances disclosures about an enterprise's involvement with a VIE; and amends certain guidance for determining whether an entity is a VIE. Under the new guidance, a VIE must be consolidated if the enterprise has both (a) the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company is evaluating the impact that this change in accounting policy will have on our consolidated financial statements. Based on our initial assessment, we anticipate that certain entities that are consolidated under our current accounting policy may not be consolidated subsequent to the effective date of the new guidance. The Company does not expect this change in accounting policy to have a material impact on our consolidated financial statements.

Non-GAAP Measurement Used by Management to Evaluate Results

The following includes the financial measure of performance earnings before interest, income taxes, depreciation and amortization, or EBITDA, that is a commonly used measure of performance in the entertainment industry. EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in United States of America or GAAP. Management has historically evaluated the operating performance of management of Tix Productions, Tix4AnyEvent and Exhibit Merchandising based upon this non-GAAP measure.

EBITDA is presented solely as a supplemental disclosure because (1) management believes it enhances an overall understanding of its past and current performance, (2) management believes it is a useful tool for investors to assess the operating performance of the business in comparison to other entertainment businesses since EBITDA excludes certain items that may not be indicative of management’s operating results, (3) measures that are comparable to EBITDA are often used as an important basis for the valuation of entertainment companies, and (4) management uses EBITDA internally to evaluate its operating performance in comparison to its competitors.

The use of EBITDA has certain limitations. EBITDA should be considered in addition to, not as a substitute for or superior to any GAAP financial measure including net income as an indicator of management’s performance, or cash flows provided by operating activities as an indicator of the Company’s liquidity, nor should it be considered as an indicator of management’s overall performance. Management’s calculation of EBITDA may be different from the calculation of EBITDA or other similarly titled measurements used by other entertainment companies, and therefore comparability may be limited. EBITDA eliminates certain substantial recurring items from net income, such as depreciation, amortization, interest expense and income taxes. Each of these items has been incurred in the past, will continue to be incurred in the future and should be considered in the overall evaluation of the Company’s results. We compensate for these limitations by providing the relevant disclosure of depreciation and amortization, interest expense and income taxes that are excluded in the calculation of EBITDA both in the reconciliation to the GAAP financial measure of net income (loss) and in the consolidated financial statements and related footnotes, all of which should be considered when evaluating the Company’s results. Management strongly encourages readers to review our financial information in its entirety and not to rely on a single measure. A reconciliation of EBITDA to net (loss) follows:

				Year ended						Year ended
				December 31, 2009						December 31, 2008

Net loss				$	(518,000	)				$	(34,664,000	)

Interest income	$	40,000					$	59,000
Interest expense		(13,000	)					(19,000	)
Net interest income	$	27,000			(27,000	)	$	40,000			(40,000	)

Depreciation					530,000						491,000
Amortization					1,966,000						4,110,000
Income taxes					40,000						-

EBITDA				$	1,991,000					$	(30,103,000	)

Liquidity and Capital Resources

At December 31, 2009, we had cash and cash equivalents of $9.9 million and total assets of $29.6 million compared to $9.2 million and $28.8 million, respectively, at December 31, 2008. Working capital at December 31, 2009 and 2008 was $7.9 million and $8.0 million, respectively. We had no debt for the years ending December 31, 2009 and 2008.

Our working capital requirements and capital for general corporate purposes, including acquisitions and capital expenditures, are funded from operations or from the selling of equity securities, and to a much lesser extent upon proceeds received upon the exercise of options and warrants, as well as borrowings from related and unrelated parties. Prior to 2008, our primary sources of liquidity and funding for operations and acquisitions were from loans from shareholders and proceeds from the sale of equity securities. We may need to incur debt or issue equity to make other strategic acquisitions. We currently do not have any lines of credit available to us. We have no commitments from third parties to provide us with any additional future financing, and may not be able to obtain future financing on favorable terms.

We generally receive cash related to the sale of discount tickets and merchandise at the time of purchase. In certain instances, but not all, the sale of premium tickets occurs before the event. In these instances, the sale is recorded as deferred revenue until the event occurs. We pay the majority of event related expenses at the time of or after the event occurs.

Our revenues and cash fluctuate based upon the seasonality of our various businesses. Examples of seasonality of our businesses include Ticketing Services, which reports slightly greater revenues in the third and fourth quarters than those reported in the first half of the year. Our Live Entertainment segment records the majority of its revenues in the first and fourth quarters. Exhibit Merchandising and AnyEvent revenues are not subject to seasonal fluctuation, but their revenues are affected by other factors including special events, additional tours, and tour cancellations. Exhibit Merchandising is less subject to seasonal fluctuations in revenues than our other businesses. EM is however, subject to revenue fluctuations as a result of exhibits that it represents moving from one location to another. Moving an exhibit from one location to another generally results in the exhibit being closed from four to six weeks. The length of time an exhibit is closed is dependent upon the type of exhibit, the distance the exhibit is to be shipped, as well as any special needs that may be required in re-setting the exhibit. We expect cash flows from operations and other financing alternatives to satisfy working capital and capital expenditures for at least the succeeding year in the absence of any significant cash requirements resulting from future acquisitions.

Sources of Cash

For the years ended December 31, 2009, 2008, and 2007, the Company generated $6.2 million, $7.6 million, and $144,000 from operating activities respectively. During the years ended December 31, 2009 and 2008, the Company did not undertake any capital fund raising activities. During the year ended December 31, 2007, the Company raised gross proceeds of $18.0 million, $17.8 million of which were the result of the Company’s sale of common stock and warrants. The Company for the years ended December 31, 2009, 2008, and 2007 received net proceeds of $23,000, $54,000, and $229,000, respectively from the exercise of options and warrants.

On September 24, 2007, the Company completed the closing of a private placement. At the closing, the Company sold to institutional and accredited investors 3,744,000 shares of its common stock for a price of $4.75 per share, or an aggregate of approximately $17.8 million. In addition, the Company also issued to the investors two-year warrants to purchase 1,870,000 shares of common stock at an exercise price of $5.50 per share. In conjunction with this offering, the Company paid fees of $75,000 and issued a total of 147,000 shares of its common stock to finders in connection with the financing.

On April 24, 2007, the Company borrowed $2,000,000 from Joseph Marsh, a stockholder of the Company, pursuant to an unsecured short-term note, with interest at 8%, per annum payable monthly. The note was due on or before April 1, 2008. During the term of the loan, Mr. Marsh had the right to convert the loan into an investment in any subsequent private placement the Company may conduct. On September 29, 2007, the Company repaid the loan in full. During the term of the loan the Company paid $76,000 in interest.

Uses of Cash

During the years ended December 31, 2009, 2008, and 2007, we used $3.0 million, $3.7 million, and $12.6 million related to investing activities.

Investments:

Acquisitions:

Effective January 2, 2008, we acquired through merger Magic and NewSpace. As consideration for the acquisition of Magic, the Company paid $2.0 million, net of cash acquired and issued 476,190 shares of stock that had a market value of $2.3 million, which approximated the fair market value of the shares at the time of issuance. As consideration for the acquisition of NewSpace, the Company paid $1.3 million, net of cash acquired and issued 571,428 shares of stock that had a market value of $2.6 million, which approximated the fair market value of the shares at the time of issuance.

Effective March 14, 2007, pursuant to an Asset Purchase Agreement (the “Agreement”) with John’s Tickets, LLC, dba AnyEvent Tickets (“AnyEvent”) we acquired the assets of AnyEvent. Pursuant to the Agreement, we purchased the domain name “http://anyevent.com,” the contents of the website “http://anyevent.com,” the inventory of sporting events, concerts and tours, and theatre tickets outstanding as of the date of the Agreement, the phone number 1-800-ANYEVENT, and all existing contracts between Any Event and other existing box offices, theatres and brokers, pursuant to which AnyEvent acquires its ticket inventory. In consideration for the assets purchased under the Agreement, we paid $300,000 in cash and issued 137,500 shares of restricted common stock valued at $4.00 per share (aggregate value $550,000), which approximated the fair market value on the date of issuance, for total purchase consideration of $850,000. Additionally, the Company paid $96,000 for the actual costs of the ticket inventory based on a post-closing audit.

On August 7, 2007, pursuant to an Asset Purchase Agreement with Exhibit Merchandising LLC, and the members of EM, the Company purchased substantially all of the assets of EM. Prior to the Company’s acquisition of EM, EM was owned by Mr. Marsh and Mr. Marshall, the former owners of Magic. The purchase price for the assets was $11.5 million in cash and 5,000,000 restricted shares of the Company’s Common Stock with a market value of $35.0 million. We also assumed $120,000 in liabilities, primarily related to inventory of EM.

Other:

During 2009, 2008, and 2007, the Company purchased $405,000, $454,000, and $678,000 of fixed assets. Further, in 2007, the Company acquired certain website domain names for an additional $132,000.

Summary

Results of Operations

Consolidated Results of Operations

										% change			% change
	Twelve Months Ended December 31,									2009v			2008v
	2009			2008			2007			2008			2007

Revenue	$	81,791,000		$	69,545,000		$	18,567,000			18	%		275	%
Operating expenses:

Direct operating expenses		60,901,000			48,752,000			11,672,000			25	%		318	%
Selling, general and administrative expenses		10,918,000			12,285,000			15,934,000			-11	%		-23	%
Depreciation and amortization		2,496,000			4,601,000			1,668,000			-46	%		176	%
Impairment of goodwill		-			25,445,000			-			N/A			N/A
Impairment of intangible assets		-			7,687,000			-			N/A			N/A
Corporate expenses		5,633,000			5,654,000			5,658,000			0	%		0	%

Operating income (loss)		1,843,000			(34,879,000	)		(16,365,000	)		105	%		-113	%
Operating margin		2	%		-50	%		-88	%

Equity in losses of nonconsolidated affiliates		(2,644,000	)		-			-

Interest expense		(13,000	)		(19,000	)		(104,000	)

Interest income		40,000			59,000			96,000

Other income - net		296,000			175,000			28,000

Loss before income taxes		(478,000	)		(34,664,000	)		(16,345,000	)

Income tax expense		40,000			-			-

Net loss	$	(518,000	)	$	(34,664,000	)	$	(16,345,000	)

Revenues

The Company earns fee revenues from the sales of discounted tickets from purchasers of the tickets and commissions from the entertainment supplier, as well as revenues from the sale of premium tickets to sporting and other entertainment events. Through our discounted ticket venues, we also offer discount dinner reservations. From Exhibit Merchandising, LLC (Ohio), we earn revenues from the management of retail outlets associated with the sale of merchandise related to touring exhibits, such as “Tutankhamun and The Golden Age of the Pharaohs.” Further, through our live entertainment segment, we earn revenues from the presentation and production of events, as well as sponsorship and ancillary revenues. Our revenues for the years ended December 31, 2009 and 2008 were $81.8 million and $69.5 million, respectively. Our revenues increased $12.3 million, or 18%, during the year ended December 31, 2009 as compared to the same period of the prior year. The increase in revenues is due to a $9.9 million increase in Live Entertainment revenues and a $4.3 million increase in Ticketing Services revenues, which were offset in part by a $1.9 million decline in revenues from our Exhibit Merchandising segment.

Our revenues for the years ended December 31, 2008 and 2007 were $69.5 million and $18.6 million, respectively. Our revenues increased $50.9 million, or 275%, during the year ended December 31, 2008 as compared to the same period of the prior year. The increase in revenues is due to the acquisitions of Magic, NewSpace and Exhibit Merchandising and the organic growth of our existing Ticketing Services. During the twelve months ended December 31, 2008, the Company realized $44.6 million of revenues from Tix Productions whose operating units Magic Arts & Entertainment and NewSpace Entertainment were acquired effective January 2, 2008, and therefore there are no corresponding revenues in 2007.

More detailed explanations for the changes in the years ended December 31, 2009, and 2008 are included in the applicable segment discussions following.

Direct Operating Expenses

Direct operating expenses include payroll and related costs, rents, cost of tickets and goods sold, artist fees, show related marketing costs, and advertising expenses along with other related costs of promoting and producing live entertainment. Direct Costs of Revenues were $60.9 million for the year ended December 31, 2009 as compared to $48.7 million for the year ended December 31, 2008. Our operating expenses increased $12.2 million or 25% during the year ended December 31, 2009 as compared to the same period of the prior year. The increase in direct operating expenses is reflective of the 18% higher overall revenues earned and the 22% higher revenues earned in our Live Entertainment segment, which has higher direct cost of goods and services than our other operating segments. Direct cost of goods and services at our Live Entertainment segment was 89% and 81% of revenues in 2009 and 2008 respectively, and increased 34% for the year ended December 31, 2009 as compared to the year ended December 31, 2008.

Direct Costs of Revenues were $48.7 million for the year ended December 31, 2008 as compared to $11.7 million for the year ended December 31, 2007. Our operating expenses increased $37.0 million or 318% during the year ended December 31, 2008 as compared to the same period of the prior year primarily as a result of a 275% increase in revenues. Additionally, the live entertainment companies that we acquired have higher direct cost of goods and services than our Ticketing Services and Exhibit Merchandising businesses, which were our primary sources of revenue in 2007.

More detailed explanations of the changes in the years ended December 31, 2009 and 2008 are included in the applicable segment discussions following.

Operating Segment Selling, Marketing and Administrative Expenses

Operating segment selling, marketing and administrative expenses include advertising and promotional costs related to the Company’s business activities, as well as the segment cost of management. Our operating segment selling, marketing and administrative expenses were $10.9 million for the year ended December 31, 2009, as compared to $12.3 million for the year ended December 31, 2008. Our selling, general and administrative expenses decreased $1.4 million, or 11%, during the year ended December 31, 2009 as compared to the same period of the prior year. The decrease in operating segments’ selling, marketing and administrative expenses is the result of a $1.3 million and $936,000 decline in selling and administrative expenses at our Exhibit Merchandising segment and Live Entertainment segment, respectively. These decreases were offset in part by an $828,000 increase in selling and administrative expenses at our Ticketing Services segment.

Our operating segment selling, marketing and administrative expenses were $12.3 million for the year ended December 31, 2008, as compared to $15.9 million for the year ended December 31, 2007. Our selling, general and administrative expenses decreased $3.6 million or 23%, during the year ended December 31, 2008 as compared to the same period of the prior year. The decrease in operating segments’ selling, marketing and administrative expenses was a result of a $12.3 million decline in selling and administrative expenses at our Ticketing Services segment, which was offset in part by a $2.8 million increase in selling and administrative expenses at Exhibit Merchandising and a $5.9 million increase in selling and administrative expenses due to the operations of our Live Entertainment segment that was formed in January 2008 from the merged assets of Magic and NewSpace.

More detailed explanations of changes in the years ended December 31, 2009 and 2008 are included in the applicable segment discussions following.

Corporate Expenses

Corporate expenses are expenses that relate to activities directed by our executive offices. Significant components of corporate expenses consist of corporate personnel and personnel-related costs, insurance, legal and accounting fees, consulting and advisory fees, merchant fees and corporate occupancy costs. Corporate expenses were relatively unchanged for the year ended December 31, 2009, as compared to the same period of the prior year. Corporate expenses were $5.6 million for the year ended December 31, 2009 and represented 7% of revenues as compared to $5.7 million for the year ended December 31, 2008 and 8% of revenues. During the year ended December 31, 2009, corporate employee-related costs declined $110,000 due to the departure of employees. This was offset in part by a $67,000 increase in board of director expenses.

Corporate expenses were relatively unchanged for the year ended December 31, 2008, as compared to the same period of the prior year. Corporate expenses were $5.7 million for the twelve months ended December 31, 2008 and represented 8% of revenues as compared to $5.7 million for the year ended December 31, 2007 and 31% of revenues. During the twelve months ended December 31, 2008, corporate consulting expenses related to marketing services and public relations declined $900,000 to $1.4 million, as compared to $2.3 million during 2007. This was offset by an increase in the corporate payroll and related expenses of $600,000 during 2008, as well as an additional $200,000 in other corporate expenses, including $100,000 related to our NASDAQ listing. The increase in payroll and related benefits was attributable to additional administrative personnel being added to the payroll during 2008 due to our growth and employees added in 2007 being employed for the entire year.

Goodwill and Intangible Asset Impairment

The Company has acquired and continues to acquire significant intangible assets that Tix records at fair value. Tix’s management makes assumptions regarding inputs into the discounted cash flow model about the timing and amount of future net cash flows, risk, cost of capital, terminal values and market participants. Each of these factors can significantly affect the value of the intangible asset. Tix engages independent valuation experts who review Tix's critical assumptions and calculations for acquisitions of significant intangibles. Tix’s management reviews intangible assets for impairment annually using an undiscounted net cash flows approach. If the undiscounted cash flows of an intangible asset are less than the carrying value of an intangible asset, the intangible asset is written down to its fair value, which is usually the discounted cash flow amount. Where cash flows cannot be identified for an individual asset, the review is applied at the lowest group level for which cash flows are identifiable. Goodwill and intangible assets are reviewed for impairment annually or when an event that could result in an impairment of goodwill occurs. Changes in forecasted operations can materially affect these estimates. Once an impairment of goodwill or other intangible assets has been recorded, it cannot be reversed. There can be no assurance that future goodwill impairments will not occur.

There were no impairments of goodwill or intangible assets in 2009 or 2007. In 2008, management believed that impairment occurred in the Company’s Exhibit Merchandising segment due to events and financial performance in 2008. In the first nine months of 2008, the King Tutankhamun exhibit, which is the Company’s Exhibit Merchandising Segment’s primary source of revenue, was in Europe where it performed below Management’s expectations due to less than expected attendance, higher cost of doing business in Europe than in the United States, and a difference in buying patterns of consumers in Europe as compared to the United States. It was believed that revenues would improve when the Exhibit returned to the United States in November 2008. However, revenues in the fourth quarter of 2008 continued to be lower than projected as consumers were forced to reduce their non-essential spending due to deteriorating economic conditions. These conditions led management to believe that an economic impairment had occurred. As a result, in 2008, with the assistance of an independent study, Tix’s management performed a study of the goodwill and intangible assets related to the acquisition of Exhibit Merchandising, and recorded impairment charges to goodwill and intangible assets of $25.4 million and $7.7 million, respectively.

Depreciation and Amortization

Our depreciation and amortization expense was $2.5 million and $4.6 million for the years ended December 31, 2009 and 2008, respectively. The decline of $2.1 million in depreciation and amortization expense in 2009 reflects a $2.1 million decrease in amortization expense. The decrease in amortization expense is the result of the $7.7 million impairment of intangible assets we recorded at December 31, 2008, which reduced future amortization expense by $500,000 a quarter.

Our depreciation and amortization was $4.6 million and $1.7 million for the years ended December 31, 2008 and 2007 respectively. The approximate increase of $2.9 million in depreciation and amortization expense in 2008 reflects a $1.8 million increase in amortization expense associated with EM and $900,000 associated with our acquisitions of Magic and NewSpace in January 2008, for which there are no corresponding charges in 2007. The increase in amortization expense associated with EM reflects twelve months of amortization in 2008, whereas 2007 reflects the five months of expense following its acquisition in August 2007. For the year ended December 31, 2008, depreciation expense increased $200,000 as compared to the same period in the prior year. The increase reflects $175,000 in depreciation expense resulting from the EM fixed assets acquired in August 2007 being depreciated for twelve months in 2008 versus five months of depreciation expense in 2007. Additionally, the remaining amount of the increase in depreciation expense was related to the fixed assets acquired in our acquisitions of Magic and NewSpace in January 2008, for which there is no corresponding expense in 2007. We expect that our future depreciation of expenses will be consistent with our past amounts recorded.

Equity in Losses of Nonconsolidated Affiliates

Other Income and (Expense)

Other Income and Expense was $296,000 for the year ended December 31, 2009, and was the result of miscellaneous box office revenues, such as patron club income and season handling fees, earned by our Live Entertainment segment Tix Productions.

Interest Income

Interest income was immaterial for all periods presented. Fluctuations in interest income were due primarily to fluctuations in our cash balances.

Interest Expense

Interest expense was $13,000, $19,000, and $104,000 for the years ended December 31, 2009, 2008, and 2007. Interest expense in 2009 and 2008 was primarily the result of interest associated with capital leases. Interest Expense of $76,000 incurred in 2007 was related to a $2.0 million note payable with a related party and an additional $28,000 incurred was a result of capital leased assets.

Cash Flows

	For The Year Ended December 31,
	2009			2008			2007

Cash flows from operating activities:
Net loss	$	(518,000	)	$	(34,664,000	)	$	(16,345,000	)
Non-cash charges, net		6,810,000			39,996,000			15,819,000
Change in cash from working capital changes		(45,000	)		2,238,000			670,000
Cash flows from operating activities	$	6,247,000		$	7,570,000		$	144,000

Cash flows from investing activities:
Investment in nonconsolidated affiliate	$	(2,644,000	)	$	-		$	-
Purchase of domain name		-			-			(132,000	)
Purchases of property, plant and equipment		(405,000	)		(454,000	)		(678,000	)
Acquisitions		-			(3,225,000	)		(11,832,000	)
Cash flows from investing activities	$	(3,049,000	)	$	(3,679,000	)	$	(12,642,000	)

Cash flows from financing activities:
Capital fund raising	$	-		$	-		$	17,784,000
Cost of treasury stock		(2,512,000	)		(2,098,000	)		-
Payments on capital lease obligations		(52,000	)		(46,000	)		(41,000	)
Net proceeds from exercise of options and warrants		23,000			54,000			229,000
Cash flows from financing activities	$	(2,541,000	)	$	(2,090,000	)	$	17,972,000

Operating Activities

Our primary short-term liquidity needs are to fund general working capital requirements while our long-term liquidity needs are primarily acquisition related. Our primary source of funds for our short-term needs is cash flows from operations, while our long-term sources of funds will be from operations and debt or equity financing. During the last few years, we have relied on the proceeds from loans from both unrelated and related parties and the sale of our debt and equity securities to provide the resources necessary to execute our business strategy.

Year Ended 2009 Compared to Year Ended 2008

Cash flows provided from operating activities were $6.2 million for the year ended December 31, 2009, compared to cash flows provided from operations of $7.6 million for the year ended December 31, 2008. The $1.4 million decline in cash provided from operating activities was the result of a $33.2 million decrease in non-cash charges and a $2.3 million decrease in working capital charges, which were offset by a $34.1 million increase in net income net of tax. The decline in non-cash charges was due to a $33.1 million impairment charge to goodwill and intangible assets in 2008 for which there was no corresponding charge in 2009, $2.1 million less amortization expense in 2009 than 2008, which was a result of the impairment of intangible assets in 2008, and a $592,000 decline in non-cash compensation to employees, directors, and consultants for services; offset in part by $2.6 million equity in the losses of nonconsolidated affiliates. Items contributing to the decline in working capital were a $780,000 increase in advances to vendors, $766,000 in advances to nonconsolidated affiliates, a $399,000 increase in accounts receivable, and a $400,000 decrease in income taxes payable.

Year Ended 2008 Compared to Year Ended 2007

Cash flows provided from operating activities were $7.6 million for the year ended December 31, 2008, compared to cash provided from operations of $144,000 for the year ended December 31, 2007. The $7.5 million increase in cash flows provided from operating activities were the result of a $33.1 million impairment charge to goodwill and intangible assets, for which there is no corresponding charge in 2007; and $2.9 million higher amortization expense in 2008 than 2007. This was partially was offset by an $18.4 million larger net operating loss in 2008 as compared to 2007; and a reduction of $11.8 million in non-cash consulting and payroll expenses from the issuance of common stock for payment of services in 2008 compared to 2007. The remaining amounts relate to operating accounts that are reflective of the level and timing of activity that occurred during the period, i.e., accounts receivable, accounts payable and accrued liabilities.

Year Ended 2007 Compared to Year Ended 2006

Cash flows from operations were $144,000 for the year ended December 31, 2007, compared to cash provided from operations of $1.2 million for the year ended December 31, 2006. The $1.0 million decrease in cash flows provided from operations were the result of a net operating loss in 2007, as compared to an operating profit in 2006, and adjustments for non-cash items and changes in accounts reflecting non-operating activities. Net loss in 2007 was $16.3 million as compared to a $39,000 profit in 2006. Items that offset the additional $16.3 million loss in 2007 were $13.0 million more in consulting and payroll expenses from the issuance of our common stock for payment of services in 2007 than in 2006, as well as $1.5 million more in amortization and depreciation expense being recognized in 2007 than in 2006. Also, during 2006, we settled our outstanding debt with a lender; the transaction resulted in us recognizing a $1.1 million gain on the transaction and there was no comparable transaction in 2007. The remaining amounts relate to operating accounts that are reflective of the level and timing of activity that occurred during the period, i.e., accounts receivable, accounts payable and accrued liabilities.

Investing Activities

Year Ended 2009 Compared to 2008

Cash used in investing activities was $3.0 million for the year ended December 31, 2009 compared to $3.7 million in 2008. For the year ended December 31, 2009, the Company invested $2.6 million, for a 40% interest in a company which was formed in 2009 to develop, produce and promote a traveling musical of Mr. Dodie Smith’s story “101 Dalmatians”. Net purchases of property, plant and equipment accounted for minor cash outlays in 2009. We expect purchase of property, plant, and equipment to be an insignificant portion of our cash flow activities. During the year ended December 31, 2008, we used $3.2 million in cash to fund the acquisitions of Magic Arts & Entertainment and NewSpace Entertainment, for which there is no corresponding transaction in 2009.

Year Ended 2008 Compared to 2007

Cash used in investing activities was $3.7 million for the year ended December 31, 2008 compared to $12.6 million in 2007. During 2008, Tix acquired through merger Magic Arts & Entertainment, LLC and NewSpace Entertainment, Inc for $2.0 million and $1.3 million respectively, as compared to 2007 when Tix acquired the assets of Exhibit Merchandising, LLC (Ohio) for $11.4 million and AnyEvent, LLC for $396,000. Additionally, in 2008 and 2007, we made investments in our infrastructure (e.g., telephone system and intellectual property) of $454,000 and $703,000 respectively. We expect to continue to consider acquisition opportunities; however there is no assurance that we can find such opportunities in the future, or if identified that we can come to an agreement with their owners. The Company expects to make similar levels of investment in its infrastructure in future years.

Year Ended 2007 Compared to 2006

Cash used in investing activities was $12.6 million for the year ended December 31, 2007 compared to $41,000 in 2006. The increase in cash used in investing activities is reflective of our acquiring the assets of Exhibit Merchandising, LLC (Ohio) for $11.4 million and AnyEvent, LLC for $396,000. There were no comparable events in 2006. Additionally, in 2007 we made investments in our infrastructure (e.g., telephone system and intellectual property) of $703,000.

Financing Activities

Year Ended 2009 Compared to 2008

Cash used in financing activities for the year ended December 31, 2009, were $2.5 million, as compared to $2.1 million during the year ended December 31, 2008. The $451,000 increase in cash used in financing activities during the year ended December 31, 2009 primarily reflects an additional $414,000 used in our stock buy-back program. Amounts paid related to capital lease obligations or amounts received related to options and warrants exercised were immaterial.

Year Ended 2008 Compared to 2007

Cash used in financing activities for the twelve months ended December 31, 2008, were $2.1 million, as compared to $18.0 million generated from financing activities during the year ended December 31, 2007. The $20.1 million decrease in cash provided from financing activities during the year ended December 31, 2008, primarily reflects $2.1 million used in our buy-back program, while in the year ended December 31, 2007 we received $17.8 million of net proceeds from the sale of common stock and warrants. Net proceeds from the exercise of options and warrants in 2008 and 2007 were $54,000 and $229,000 respectively. Partially offsetting these increases was the repayment in 2008 and 2007 of long term capital lease obligations of $46,000 and $41,000 respectively.

Year Ended 2007 Compared to 2006

Cash flow from financing activities was $18.0 million for the year ended December 31, 2007, compared to $499,000 in 2006. The $17.5 million increase in cash provided from financing activities during the year ended December 31, 2007, primarily reflects a $16.8 million increase in net proceeds received from the sale of common stock and warrants in 2007, as compared to 2006. We received comparable amounts of net proceeds from the exercise of options and warrants in 2007 and 2006. Net proceeds from the exercise of options and warrants in 2007 and 2006 were $229,000 and $211,000 respectively. Partially offsetting these increases was the repayment in 2007 and 2006 of long term capital lease obligations and convertible debentures of $41,000 and $582,000 respectively.

In April 24, 2007, we borrowed $2,000,000 from a stockholder of the Company, pursuant to an unsecured short-term note, with interest at 8%, per annum payable monthly. On September 29, 2007 the Company repaid the loan in full.

Discussion of Segment Results

We operate in three reportable segments: ticketing services, event and branded merchandising, and Tix Productions, Inc. (TPI).

Revenue and expenses earned and charged between segments are eliminated in consolidation. Corporate expenses, interest income, interest expense and income taxes are managed on a total company basis.

Information related to our operating segments is as follows:

	Ticketing			Exhibit			Live					Consolidated
	Services			Merchandising			Entertainment		Corporate			and Combined

2009
Revenue	$	18,257,000		$	9,079,000		$	54,455,000	$	-		$	81,791,000
Direct cost of revenues		6,964,000			5,462,000			48,475,000		-			60,901,000
Selling, general and administrative expenses		3,548,000			2,422,000			4,948,000		5,633,000			16,551,000
Depreciation and amortization		515,000			1,179,000			790,000		12,000			2,496,000
Operating income (loss)	$	7,230,000		$	16,000		$	242,000	$	(5,645,000	)	$	1,843,000

Current assets	$	3,073,000		$	3,127,000		$	5,349,000	$	4,733,000		$	16,282,000
Fixed assets		670,000			478,000			82,000		78,000			1,308,000
Intangible assets and goodwill		232,000			3,851,000			6,311,000		-			10,394,000
Other non-current assets		180,000			21,000			1,371,000		6,000			1,578,000
Total assets	$	4,155,000		$	7,477,000		$	13,113,000	$	4,817,000		$	29,562,000

2008
Revenue	$	13,952,000		$	11,030,000		$	44,563,000	$	-		$	69,545,000
Direct cost of revenues		5,725,000			6,877,000			36,150,000		-			48,752,000
Selling, general and administrative expenses		2,720,000			3,681,000			5,884,000		5,654,000			17,939,000
Impairment of goodwill		-			25,445,000			-		-			25,445,000
Impairment of intangible assets		-			7,687,000			-		-			7,687,000
Depreciation and amortization		501,000			3,173,000			916,000		11,000			4,601,000
Operating income (loss)	$	5,006,000		$	(35,833,000	)	$	1,613,000	$	(5,665,000	)	$	(34,879,000	)

Current assets	$	2,960,000		$	4,969,000		$	2,784,000	$	3,770,000		$	14,483,000
Fixed assets		583,000			711,000			109,000		30,000			1,433,000
Intangible assets and goodwill		523,000			4,769,000			6,755,000		-			12,047,000
Other non-current assets		65,000			13,000			801,000		6,000			885,000
Total assets	$	4,131,000		$	10,462,000		$	10,449,000	$	3,806,000		$	28,848,000

2007
Revenue	$	14,284,000		$	4,283,000		$	-	$	-		$	18,567,000
Direct operating expenses		8,829,000			2,843,000			-		-			11,672,000
Selling, general and administrative expenses		15,029,000			905,000			-		5,658,000			21,592,000
Depreciation and amortization		415,000			1,229,000			-		24,000			1,668,000
Operating income (loss)	$	(9,989,000	)	$	(694,000	)	$	-	$	(5,682,000	)	$	(16,365,000	)

Current assets	$	2,133,000		$	5,623,000		$	-	$	4,251,000		$	12,007,000
Fixed assets		668,000			759,000			-		21,000			1,448,000
Intangible assets and goodwill		819,000			40,820,000			-		-			41,639,000
Other non-current assets		46,000			22,000			-		6,000			74,000
Total assets	$	3,666,000		$	47,224,000		$	-	$	4,278,000		$	55,168,000

Balances have been changed for consistency and comparability of assets and expenses.

The following is a summary of the operating results of our operating segments.

Ticketing Services:

Our Ticketing Services segment operating results were as follows:

Segment Reporting – Ticketing Services (T4T, AE, Tix4Members)

										% Change			% Change
	Year Ended December 31,									2009 vs.			2009 vs.
	2009			2008			2007			2008			2008

Revenue	$	18,257,000		$	13,952,000		$	14,284,000			31	%		-2	%
Operating Expenses:
Direct operating expenses		6,964,000			5,725,000			8,829,000			22	%		-35	%
Selling, general and administrative expenses		3,548,000			2,720,000			15,029,000			30	%		-82	%
Depreciation and amortization		515,000			501,000			415,000			3	%		21	%

Operating income (loss)	$	7,230,000		$	5,006,000		$	(9,989,000	)		44	%		150	%

Operating margin		40	%		36	%		-70	%		10	%		151	%

Revenues

The Ticketing Services operations are performed by our Tix4Tonight subsidiary. Tix4Tonight has three operating units: Tix4Tonight, our discount ticket seller, Tix4AnyEvent (AnyEvent), our premium ticketing operation, and Tix4Members, our membership group ticket sales program. The Ticketing Service segment earns fee revenues from the sales of discounted tickets to purchasers of the tickets and commissions from the entertainment supplier, as well as revenues from the sale of premium tickets to sporting and other entertainment events. Through our discounted ticket venues, we also offer discount dinner reservations. Ticketing Services revenues were $18.3 million for the year ended December 31, 2009 as compared to $14.0 million for the year ended December 31, 2008. Our revenues increased $4.3 million, or 31%, during the year ended December 31, 2009 as compared to the same period of the prior year. The increase in Ticketing Service revenues is the result of a $4.8 million increase in Tix4Tonight revenues and a $365,000 increase in ancillary revenues i.e. the sale of dinner reservations and tee times, offset by an $841,000 decline in premium ticket revenues. The decline in premium ticket revenues is primarily the result of lower demand for premium concert tickets and sporting event tickets due to overall weak economic conditions across the United States. Revenues earned through Tix4Members were not meaningful. Tix4Tonight revenues for the year ended December 31, 2009 and 2008 were $16.6 million and $11.8 million, which is an increase of $4.8 million, or 40% in 2009 as compared to the same period in 2008. The increase reflects both higher demand for discount tickets as well as a higher average selling ticket price in 2009. Sales of Tix4Tonight discount show tickets increased by 306,000 tickets or 29%, to 1,366,000 discount show tickets for the year ended December 31, 2009. The gross sales value of show tickets sold to customers plus commissions and fees earned were $77.7 million for the year ended December 31, 2009, as compared to $53.9 million for the year ended December 31, 2008, or a 44% increase. The average selling price per ticket in 2009 was $56.86 per ticket, which represented an increase of $5.98 per ticket or 12% as compared to $50.88 per ticket in 2008.

Ticketing Services revenues were $14.0 million for the year ended December 31, 2008 as compared to $14.3 million for the year ended December 31, 2007. Our revenues were relatively unchanged during the year ended December 31, 2008 as compared to the same period of the prior year. The stability in our Ticket Service segment revenues is the result of two factors. The first factor is that we have changed our strategy with regards to premium tickets. AnyEvent’s customer changed from the general public to national retail ticket brokers. As a result of this change, we are assuming less risk. The effect of this change in strategy was that our premium ticket revenues declined $5.1 million to $1.2 million for the year ended December 31, 2008. The second factor is Tix4Tonight’s revenues increased $4.7 million or 59% in 2008, as compared to the same period in 2007. The increase reflects both higher demand for discount tickets as well as a higher average selling ticket price in 2008. Tix4Tonight discount tickets sold increased 346,000 tickets or 48% to 1,060,000 discounted show tickets for the year ended December 31, 2008. This increase in revenues in 2008 as compared to 2007 reflects an increased customer demand for tickets, and higher revenues at our dinner reservation operations. Tix4Tonight earned commissions and fees related to the sale of $53.9 million of tickets to Las Vegas shows and events for the year ended December 31, 2008, as compared to $33.2 million for the year ended December 31, 2007. The average ticket price increased to $50.88 during the year-ended December 31, 2008, as compared to $46.56 for the comparable period in 2007.

Ticketing Services revenues were $14.3 million for the year ended December 31, 2007 as compared to $5.4 million for the year ended December 31, 2006. Our revenues increased $8.9 million, or 165%, during the year ended December 31, 2007 as compared to the same period of the prior year. The increase in Ticket Service segment revenues is the result of two factors. The first factor is AnyEvent was acquired in March 2007 and its results are reflected in this segment. During the approximately 10 months that we owned AnyEvent, it generated $6.2 million in revenues. The second factor is Tix4Tonight’s revenues increased $2.6 million or 49% in 2007 as compared to the same period in 2006. The increase reflects both higher demand for discount tickets as well as an average higher selling price per ticket in 2007. Tix4Tonight discount tickets sold increased 141,000 tickets or 27% to 714,000 discounted show tickets for the year ended December 31, 2007. This increase in revenues in 2007 as compared to 2006 reflects an increased customer demand for tickets, and new sources of revenue, including discount dinner reservations. Commissions and fees were earned on the gross sales value of show tickets sold to customers of $33.2 million for the year ended December 31, 2007, as compared to $23.0 million for the year ended December 31, 2006. The average ticket price increased to $48.39 in 2007, as compared to $36.38 in 2006.

During 2009 and 2008, two producers of shows accounted for 47% and 37% of revenues, respectively. The first producer’s shows represented 32% and 24% of our Ticketing Services segment’s revenues during 2009 and 2008, respectively. The second producer’s shows represented 15% and 13% of our Ticketing Services segment’s revenues during 2009 and 2008, respectively. Each producer’s shows appear at a different venue, hotel or theatre; however, no single show, venue or theatre was greater than 10% of revenues. During the year ended December 31, 2007, there was no single producer of shows that accounted for 10% or more of ticketing services revenues.

Direct Operating Expenses

Ticketing Services direct operating expenses include payroll and related costs, rents, and cost of tickets sold. Direct operating expenses were $6.9 million for the year ended December 31, 2009 as compared to $5.7 million for the year ended December 31, 2008. Our direct operating expenses increased $1.2 million or 22%. The increase in direct operating expenses was the result of a $949,000 increase in rent expense and a $718,000 increase in employee related expense, which were offset in part by a $473,000 decline in direct operating costs associated with our premium ticket business. The increase in rent expense was due to a $127,000 increase as a result of new ticket outlets, $282,000 annual rent increases, $186,000 increase in bonus rents, and a $354,000 increase associated with a full year of rent expense in 2009 as compared to three months rent expense on a location that opened in October 2008. Employee related expenses increased 32% to $718,000 which is consistent with the 29% increase in discount show tickets sold. Offsetting the increase in direct operating expenses at our discount ticketing operations was a $473,000 decline in direct operating expenses at our premium tickets operations, which is consistent with the $841,000 or 72% decline in its revenue. The direct operating expenses for the years ended December 31, 2009 and 2008, as a percentage of revenues were 38% and 41%, respectively. The decline in direct operating expenses as a percentage of revenues in 2009 as compared to 2008 is reflective of the fixed nature of the operating expenses.

Direct operating expenses were $5.7 million for the year ended December 31, 2008 as compared to $8.8 million for the year ended December 31, 2007. Our direct operating expenses declined $3.1 million or 35%. The decline in direct operating expenses is reflective of our change in strategy regarding the sale of premium tickets. During the year ended December 31, 2008, our premium ticket direct operating cost declined $4.5 million to $1.0 million, as a result of a corresponding decline in premium ticket revenues. The decline in direct operating costs associated with our premium ticket business was offset in part by higher costs associated with the higher revenues from our discount ticket operations. Direct operating cost expenses associated with our discount ticket operations increased 40%, which is consistent with our 59% increase in revenues associated with our discount tickets operations.

Direct Costs of Revenues were $8.8 million for the year ended December 31, 2007 as compared to $2.2 million for the year ended December 31, 2006. Our operating expenses increased $6.6 million or 306%. The higher operating expenses were reflective of the higher revenues from our existing discount ticket operations, as well as the acquisition of AnyEvent.

Direct operating expense of same day discount ticket sales were $3.4 million for the year ended December 31, 2007, as compared to $2.2 million for the year ended December 31, 2006, an increase $1.2 million or 50%. The increase in direct operating costs is consistent with the 49% increase in discount ticket revenues. Direct costs of revenues increased to 42% of revenues for the year ended December 31, 2006, as compared to 40% of revenues for the year ended December 31, 2006. The slightly higher increase in direct operating expense as a percentage of revenues as compared to 2006, is primarily due to the start up cost related to opening our fifth leased ticket outlet in November 2007.

Direct operating expense for our premium ticket operation, AnyEvent, were $5.4 million, from the date of acquisition on March 14, 2007 to December 31, 2007. Direct operating expenses represented 87% of revenues earned.

Selling, Marketing and Administrative Expenses

Ticketing Services selling, marketing and administrative expenses include advertising and promotional costs related to its business activities, as well as the segment cost of management. Selling, general, and administrative expenses for the years ended December 31, 2009 and 2008 were $3.5 million and $2.7 million, respectively. Our selling, marketing, and administrative expenses increased $828,000 or 30% during the year ended December 31, 2009 as compared to 2008. The increase in selling, general, and administrative expenses is reflective of the 31% increase in revenue activity at the Ticketing Services segment. Selling, marketing and administrative expenses were 19% of revenues during the years ended December 31, 2009 and 2008.

Tix4Tonight’s selling, marketing and administrative expenses were $2.7 million for the year ended December 31, 2008, as compared to $15.0 million for the year ended December 31, 2007. Our selling, marketing and administrative expenses decreased $12.3 million or 82%, during the year ended December 31, 2008. The $12.3 million decrease in selling, marketing and administrative expenses is the result of the Company issuing $12.6 million of common stock in 2007 as a payment for certain consulting services provided in conjunction with the development of strategic relationships with producers, presenters and venues for which there was no corresponding expense in 2008. This was partially offset by a $300,000 increase in Tix4Tonight’s selling, marketing, and administrative expense due to additional selling, and administrative expense associated with an increase in revenues.

Tix4Tonight’s selling, marketing and administrative expenses were $15.0 million for the year ended December 31, 2007, as compared to $1.2 million for the year ended December 31, 2006. Our selling, marketing and general and administrative expenses increased $13.8 million or 1,138%, during the year ended December 31, 2007. The $13.8 million increase in selling, general and administrative expenses includes $12.6 million related to consulting expenses. We issue our common stock as a payment for certain consulting services provided in conjunction with the development of strategic relationships with producers, presenters and venues. These agreements are reviewed and approved by our Board of Directors prior to their being entered and have durations that vary from two to four years. Due to the nature of the work being performed by the service provider there are no performance requirements included in these agreements, as a result the fair value of the common stock is expensed at the time the agreement is entered into by us. During 2007, we paid $1.7 million and issued common stock and warrants, which at the time of issuance had a fair market value of $10.9 million. The remaining $1.2 million increase is due to additional selling, and administrative expense associated with an increase in revenues and our acquisition of John's Tickets.

Exhibit Merchandising:

Our Exhibit Merchandising segment operating results were as follows:

Segment Reporting - Exhibit Merchandising

										% Change			% Change
	Year Ended December 31,									2009 vs.			2009 vs.
	2009			2008			2007			2008			2008

Revenue	$	9,079,000		$	11,030,000		$	4,283,000			-18	%		158	%
Operating Expenses:
Direct operating expenses		5,462,000			6,877,000			2,843,000			-21	%		142	%
Selling, general and administrative expenses		2,422,000			3,681,000			905,000			-34	%		307	%
Impairment of goodwill		-			25,445,000			-			-100	%		N/A
Impairment of intangible assets		-			7,687,000			-			-100	%		N/A
Depreciation and amortization		1,179,000			3,173,000			1,229,000			-63	%		158	%

Operating income (loss)	$	16,000		$	(35,833,000	)	$	(694,000	)		100	%		-5063	%

Operating margin		0	%		-325	%		-16	%		100	%		-1905	%

Exhibit Merchandising offers exhibit and theatrical producers the opportunity for additional revenue streams while adding the retail expertise required to manage the operations, thereby leveraging the use of EM’s expertise and knowledge in the specialized retail world. Exhibitors receive a simple royalty payment each period with no other expense to the producer.

Revenues

EM provides retail specialty stores for touring museum exhibitions and touring theatrical productions. EM provides a complete turnkey retail store with commercially-available and extensive custom-branded product for sale. It operates the stores in spaced rented in conjunction with the exhibit. EM earns its revenues from the management of retail outlets associated with the sale of merchandise related to touring exhibits, which is primarily derived from “Tutankhamun and The Golden Age of the Pharaohs” and “Tutankhamun the Golden King and the Great Pharaohs.” EM is subject to revenue fluctuations as a result of the exhibits that it represents moving from one location to another. Moving an exhibit from one location to another generally results in the exhibit being closed from four to six weeks. The length of time an exhibit is closed is dependent upon the type of exhibit, the distance the exhibit is to be shipped, as well as any special needs that may be required in re-setting the exhibit. “Tutankhamun and The Golden Age of the Pharaohs” and “Tutankhamun the Golden King and the Great Pharaohs” are currently booked in museums through July 2011 and December 2012, respectively. During the years ended December 31, 2009 and 2008, EM generated $9.1 million and $11.0 million in revenues, respectively. The $1.9 million decline in revenues during the year ended December 31, 2009 is due to three reasons. The first reason is that despite an overall 6% increase in visitor attendance at the exhibits supported by EM, there was a 22% decline in revenues per attendee as revenues per attendee in 2009 declined to $4.95 per attendee from $6.36 per attendee in 2008. Management believes this decline in revenues per attendee is due to the generally poor economic conditions in the United States. The second reason is the exhibit, “Tutankhamun and The Golden Age of the Pharaohs” taking 45 days to move from Dallas to San Francisco which caused the exhibit to be closed for approximately 15 additional days as compared to 2008. Lastly, a competing store was established at one of the exhibit locations. For the year ended December 31, 2008 revenues from our Exhibit Merchandising operation were $11.0 million or $917,000 per month as compared to $4.3 million or $860,000 per month for the five months of operation from August 8, 2007, the acquisition date, to December 31, 2007.

Direct Operating Expenses

EM’s operating expenses include payroll and related costs, rents, and cost of goods sold. Direct operating expenses for the years ended December 31, 2009, 2008, and 2007 were $5.5 million or 60% of revenues, $6.9 million or 62% of revenues, and $2.8 million or 66% of revenues, respectively.

Selling, Marketing and Administrative Expenses

EM’s selling, marketing and administrative expenses include advertising and promotional costs related to its business activities, as well as the segment cost of management. EM’s selling, marketing and administrative expenses for the twelve months ended December 31, 2009, 2008, and 2007 were $2.4 million or 27% of revenues, $3.7 million or 33% of revenues, and $905,000 or 21% of revenues. The higher selling, marketing and administrative expenses incurred during 2008 are reflective of legal fees associated with the establishment of the foreign subsidiaries and the associated cost of housing, travel and transportation. In the first three quarters of 2009, the exhibits for which EM provided merchandising services were all domestic shows, whereas in 2008, all of the shows were located abroad.

Goodwill and Intangible Asset Impairment

There were no impairments of goodwill or intangible assets for the years ended December 31, 2009 and 2007. At December 31, 2008, as part of the annual review of goodwill and intangible assets, management determined an impairment of goodwill and intangible assets had occurred. As a result, in 2008, Tix’s management recorded impairment charges to goodwill and intangible assets of $25.4 million and $7.7 million, respectively. Once an impairment of goodwill or other intangible assets has been recorded, it cannot be reversed. There can be no assurance that future goodwill impairments will not occur.

Live Entertainment:

Our Live Entertainment segment operating results were as follows:

Segment Reporting – Live Entertainment

									% Change			% Change
	Year Ended December 31,								2009 vs.			2009 vs.
	2009			2008			2007		2008			2008

Revenue	$	54,455,000		$	44,563,000		$	-		22	%		N/A
Operating Expenses:
Direct operating expenses		48,475,000			36,150,000			-		34	%		N/A
Selling, general and administrative expenses		4,948,000			5,884,000			-		-16	%		N/A
Depreciation and amortization		790,000			916,000			-		-14	%		N/A

Operating income		242,000			1,613,000			-		-85	%		N/A

Operating margin		0	%		4	%		N/A		-88	%		N/A

As a live entertainment presenter, we book touring theatrical and concert presentations with a history of successful commercial appeal as well as participate in the development and roll-out of new theatrical and concert presentations often originating on Broadway in New York or the West End in London. We use a wide variety of marketing channels to sell tickets to these programs including our substantial subscriber-based businesses in eleven US cities, our Salt Lake City based group and corporate sales team, and standard marketing tools including print, radio, television, outdoor and e-marketing tools. In addition, we invest in shows or productions in advance of their initial tour to obtain favorable touring and distribution rights.

Revenues

During the years ended December 31, 2009 and 2008, revenues from our Live Entertainment operations were $54.5 million and $44.6 million, respectively. The $9.9 million increase in revenues was due to several shows being presented in arenas where ticket prices and number of attendees are greater than the community theaters, where many of our shows generally play. Although the overall number of show performances decreased in 2009 to 1,045 as compared to 1,076 show performances in 2008, there was an increase in show dates for the shows that played in the arenas. These shows that played in arenas had 112 show performances in 2009 as compared to 33 show performances in 2008, which led to a $9.9 million increase in revenues.

Revenues from live entertainment are a function of a number of elements: revenue is a direct reflection of tickets sold times ticket prices plus ancillary revenue streams including sponsorships and revenues generated through premium ticketing opportunities. In instances where the Company acts as the primary obligor with suppliers, assumes credit risk, directs the pricing of the tickets and purchases the advertising, the Company records these revenues at gross. In other instances where we only receive a fee and are not the principal obligors to vendors, we record these revenues at net. It is management’s belief that this is consistent with the authoritative guidance provided by the Financial Accounting Standards Board. Revenues from our Live Entertainment operations are seasonal with the first and fourth quarters being traditionally the strongest.

During 2009, our Live Entertainment segment had several shows that represented approximately 10% of its revenues. Shows that represented approximately 10% of our revenues were “Walking with Dinosaurs,” and “Mannheim Steamroller.”

Direct Operating Expenses

During the years ended December 31, 2009 and 2008, direct operating expense was $48.5 million or 89% of revenues and $36.1 million or 81% of revenues, respectively. The higher direct operating cost as a percentage of revenues reflects the greater number of tickets that have been discounted in 2009 as compared to 2008 as a strategic response to lower demand resulting from the poor economic climate. Expenses that would be characterized as direct operating expenses include the guarantees, profit sharing and royalties paid directly to the touring productions, direct expenses of the theater which include staffing, rent and box office charges, marketing costs and production costs which include equipment rentals, stagehands and the cost of our production and settlement manager to attend the production. Live Entertainment productions typically have sharing arrangements whereby the artist receives an increasingly higher share of the operating income as revenues increase, therefore, significant increases in presentation revenue do not typically result in comparable increases in operating income as much of that goes to the production at hand. On the other hand, significant decreases in presentation revenue do have a comparable impact on operating income as the largest burden of risk in these presentations lies with the promoter. In instances where the Company acts as the primary obligor with suppliers, assumes credit risk, directs the pricing of the tickets and purchases the advertising, the Company records these expenses at gross.

Selling, Marketing and Administrative Expenses

Live Entertainment’s selling, marketing and administrative expenses include advertising and promotional costs related to its business activities, as well as the segment cost of management. Live Entertainment’s administrative expenses for the years ended December 31, 2009 and 2008, were $4.9 million or 9% of revenues, and $5.9 million or 13% of revenues, respectively. The decline in selling, marketing, and administrative expenses was due to Management’s decision to reduce costs to maximize profitability.

Depreciation and Amortization

Depreciation and amortization expense incurred during the years ended December 31, 2009 and 2008 was $790,000 and $916,000, respectively, and primarily relates to amortization of the intangible assets that resulted from the acquisitions of Magic and NewSpace. We expect to incur a similar level of depreciation and amortization for 2010.

Contractual Obligations and Commitments

At December 31, 2009, the Company did not have any material commitments for capital expenditures. The Company’s principal commitments for the next five fiscal years consisted of contractual commitments as summarized below.

	Payments due by Fiscal Years Ending December 31,
	Total		2010		2011		2012		2013		2014

Debt obligations (1)	$	1,000,000	$	1,000,000	$	-	$	-	$	-	$	-

Capital lease obligations		87,000		67,000		9,000		8,000		3,000		-

Operating lease obligations (2)		12,200,000		3,506,000		3,030,000		2,582,000		1,512,000		1,570,000

Total contractual cash obligations	$	13,287,000	$	4,573,000	$	3,039,000	$	2,590,000	$	1,515,000	$	1,570,000

(1)

Includes a $1.0 million promissory note related to the acquisition of All Access in March 2010.

(2)

Includes $2.9 million in operating lease obligations assumed related to the acquisition of All Access in March 2010.

Off-Balance Sheet Arrangements:

At December 31, 2009, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk is limited primarily to interest income sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because a significant portion of our investments are in short-term debt securities issued by the U.S. government and institutional money market funds. The primary objective of our investment activities is to preserve principal. Due to the nature of our short-term investments, we believe that we are not subject to any material market risk exposure. We do not have any derivative financial instruments or foreign currency instruments. If interest rates had varied by 10% in the year ended December 31, 2009, it would not have had a material effect on our results of operations or cash flows for that period.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements are listed at the "Index to Consolidated Financial Statements" elsewhere in this document.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

Item 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that the information disclosed in the reports we file with the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as of December 31, 2009, in accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act to ensure the information required to be disclosed by us in the reports that we file or submit under the Exchange Act, as amended is recorded, processed, summarized and reported within the time period specified in SEC rules and forms.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls, and procedures or internal controls will prevent all possible error and fraud. Our disclosure controls and procedures are, however, designed to provide reasonable assurance of achieving their objectives, and our Chief Executive Officer and Chief Financial Officer have concluded that our financial controls and procedures are effective at that reasonable assurance level.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our management conducted an evaluation of the effectiveness of our internal controls over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Based on its evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2009.

Our independent registered public accounting firm, Weinberg & Company, P.A., who also audited our consolidated financial statements, independently assessed the effectiveness of our internal control over financial reporting as of December 31, 2009, as stated in their report which is included in this Annual Report.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the fourth quarter of 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The following table and text set forth the names and ages of all directors and executive officers of the Company as of February 15, 2010. The Board of Directors is comprised of only one class. All of the directors will serve until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. There are no family relationships among directors and executive officers. There are no arrangements or understandings between any two or more of the Company's directors or executive officers.

As a condition to the Closing, of the Company’s acquisition of Exhibit Merchandising, LLC (EM) the Company entered into a Voting Agreement with Joseph Marsh, a former owner of EM pursuant to which, for a period of four years, Mr. Marsh granted the Company, through its board of directors, the right to vote all of his shares, including the shares acquired pursuant to the Asset Purchase Agreement. As of the date hereof, such shares total 4,555,000.

Also provided herein is a brief description of the business experience of each director and executive officer during the past five years and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities laws.

Name	Age	Position(s)
Mitch Francis	54	Chairman of the Board of Directors, President, Chief Executive Officer

Kimberly Simon	42	Chief Operating Officer

Matthew Natalizio	54	Chief Financial Officer

Joseph Marsh	57	Director, Co-CEO of Tix Productions, Inc.

Benjamin Frankel	73	Director

Norman Feirstein	60	Director

Sam Georges	63	Director

Andrew Pells	53	Director

None of the Company's directors or executive officers has, during the past ten years, (1) had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) been convicted in a criminal proceeding or subject to a pending criminal proceeding; (3) been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities; or (4) been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission, to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Biographies of Directors and Executive Officers:

Mitch Francis founded Tix Corporation in 1993 and has been the Chairman of the Board of Directors and Chief Executive Officer since its inception. Mr. Francis is an innovative leader whose inventions have yielded two United States patents with another three inventions patent- pending. All of these inventions have contributed to the unique businesses and success of Tix Corporation. Mr. Francis was one of the first real estate majors in the United States at the University of Colorado and developed numerous shopping centers, office buildings and condominium projects. His real estate expertise has been a valuable asset to the Company in identifying and negotiating its retail facilities which have been a significant element of Tix Corporation’s success.

Kimberly Simon has been employed by the Company for over twelve years. Ms. Simon started her career with the Company in September 1997 as the general manager of the Company's Las Vegas ride simulator facility. Effective March 1, 2007, Ms. Simon was promoted to Chief Operating Officer and is responsible for all day-to-day operations. Prior to joining the Company, Ms. Simon gained managerial experience with several national companies. Ms. Simon graduated from Northern Illinois University with a Bachelor’s Degree.

Matthew Natalizio has been Chief Financial Officer of the Company since September 2007. Prior to joining us, Mr. Natalizio was the CFO of CytRx Corporation from July 2004 to September 2007, and from November 2002 to December 2003, he was President and General Manager of a privately held furniture manufacturing company. Prior to that, from January 2000 to October 2002, he was Chief Financial Officer of Qualstar Corporation, a publicly traded designer and manufacturer of data storage devices. Mr. Natalizio was Vice President of Finance and Treasurer from 1993 until 1998, and as Vice President, Operations from 1998 through 1999, of Superior National Insurance Group, Inc., a publicly traded insurance company. Mr. Natalizio is a CPA (inactive) and was a Senior Manager at KPMG. He earned his Bachelor of Arts degree in Economics from the University of California, Los Angeles.

Joseph Marsh was elected as a director of the Company effective July 8, 2009. Mr. Marsh has produced and promoted concerts, theatricals and family shows worldwide for the last 20 years. Currently, Mr. Marsh is an investor in the exhibits of “King Tutankhamun” and “Diana: a Celebration”, a showcase of the life and works of Diana, Princess of Wales. Mr. Marsh continues to produce David Copperfield worldwide and is active in the national tour of Lord of the Dance. Mr. Marsh is currently involved in the production of shows throughout North America including The Magic of David Copperfield, Michael Flatley’s Lord of the Dance, Jesus Christ Superstar, Bob the Builder Live, Mannheim Steamroller, and 101 Dalmatians The Musical. Mr. Marsh is also a partner in the Stonebridge project in Cleveland, Ohio, and his management company owns and manages over 200,000 square feet of commercial property, 1,000 acres of developable land and two large housing developments.

Benjamin Frankel has been a director of the Company since March 17, 1995. Mr. Frankel is a certified public accountant and was a partner in the accounting firm of Frankel, Lodgen, Lacher, Golditch, Sardi & Howard and its predecessors from 1965 through 2005. In 2006, Mr. Frankel left his former firm and formed Frankel, LoPresti & Co., an accountancy corporation.

Norman Feirstein has been a director of the Company since March 17, 1995. Mr. Feirstein practiced law as a sole practitioner from 1978 until July 1993. Mr. Feirstein currently practices law as the Law Offices of Norman Feirstein.

Sam Georges joined the Company as a director in February 2007. Mr. Georges is the Chief Executive Officer and President of various entities affiliated with Anthony Robbins, and has worked with Mr. Robbins since 1993. Mr. Georges also serves as a director of many of the same privately-held companies affiliated with Anthony Robbins.

Andrew Pells was elected as a Director of the Company effective July 2, 2007. From 1990 to December 2003, Mr. Pells served as an executive of Hotels.com and its predecessors in various management capacities. From January 1, 2004 to the present, Mr. Pells has been an independent consultant to the Internet/Travel Industry.

Compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended:

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors, executive officers, and persons who own more than 10% of a registered class of the Company's equity securities to file various reports with the Securities and Exchange Commission concerning their holdings of, and transactions in, securities of the Company. Copies of these filings must be furnished to the Company.

To the Company’s knowledge based solely on its review of the copies of the Section 16(a) reports furnished to the Company and written representations to the Company that no other reports were required, the Company believes that all individual filing requirements applicable to the Company's directors, executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities complied with Section 16(a) during 2009.

Family Relationships among Directors and Executive Officers:

There were no family relationships among directors and executive officers during the years ended December 31, 2009, 2008, and 2007.

Indebtedness of Directors and Executive Officers:

None of the Company's directors or executive officers or their respective associates or affiliates is indebted to the Company.

Legal Proceedings with Affiliates:

The Company is not involved in any legal proceedings with any director, officer, affiliate or stockholder of the Company.

Code of Ethics:

The Company has adopted a written Code of Ethics that applies to its senior management. A copy of the Company's Code of Ethics, executed by the Company's Chief Executive Officer and Chief Financial Officer, has been filed as an amended exhibit to this Annual Report on Form 10-K. A copy of the Company's Code of Ethics is available on the Company’s website http://www.tixcorp.com or alternatively to any shareholder by addressing a request to the attention of the Secretary of the Company and mailing such request to the Company's corporate offices. Any amendment to the Code of Ethics or any waiver of the Code of Ethics will be disclosed promptly following the date of such amendment or waiver pursuant to a filing under a Current Report on Form 8-K with the Securities and Exchange Commission.

Changes in Procedures to Nominate Directors:

Since the date of the Company's last disclosures pursuant to Item 7(d)(s)(ii)(G) of Schedule 14A of the Securities Exchange Act of 1934, as amended, there have been no material changes to the procedures by which security holders may recommend nominees to the Company's Board of Directors.

Meetings and Committees of the Board of Directors:

During the year ended December 31, 2009, the Company’s Board of Directors met on three occasions. Additional board actions were taken by unanimous written consent.

The Company has a Nomination and Governance Committee of the Board of Directors. The purpose of the Nomination and Governance Committee of the Board of Directors of Tix Corporation is to assist the Board in discharging its duties relating to corporate governance and the composition and evaluation of the Board. The members of the Committee are Messrs. Pells, Feirstein and Georges, none of whom is an employee of the Company. Mr. Pells serves as the Chairman of the Committee. Each of the members is an “independent director” under the NASDAQ and Exchange Act rules.

The Compensation Committee of the Board of Directors consists of three directors of the Company, Andy Pells, Norman Feirstein and Sam Georges, none of whom is an employee of the Company. Mr. Feirstein serves as the Chairman of the Committee. The Compensation Committee reviews the performance of the executive officers of the Company and reviews the compensation programs and agreements for key employees, including salary and bonus levels. Each of the members is an “independent director” under the NASDAQ rules.

The Audit Committee of the Board of Directors consists of Andy Pells, Norman Feirstein and Sam Georges, none of whom is an employee of the Company. Mr. Georges serves as the Chairman of the Committee. The audit committee reviews, acts on, and reports to the Board of Directors with respect to various auditing and accounting matters, including the selection of the Company's independent public accountants, the scope of the annual audits, the nature of non-audit services, the fees to be paid to the independent public accountants, the performance of the independent public accountants, and the accounting practices of the Company. Each of the members is an “independent director” under the NASDAQ rules. The Board of Directors has determined that Mr. Georges is an audit committee financial expert as that term is defined in Item 407(d)(5) of the Exchange Act.

ITEM 11. EXECUTIVE COMPENSATION

Overview of Executive Compensation Program

The Compensation Committee of our board of directors has responsibility for establishing, implementing and monitoring our executive compensation program philosophy and practices. The Compensation Committee seeks to ensure that the total compensation paid to our named executive officers is fair, reasonable and competitive. Generally, the types of compensation and benefits provided to the named executive officers are similar to those provided to our other officers.

Throughout this Annual Report, the individuals included in the Summary Compensation Table are referred to as the “named executive officers.”

Compensation Philosophy and Objectives

The components of our executive compensation consist of salary, annual cash bonuses awarded based on the Compensation Committee’s subjective assessment of each individual executive’s job performance during the past year, stock option grants to provide executives with longer-term incentives, and occasional special compensation awards (either cash or stock options) to reward extraordinary efforts or results.

The Compensation Committee believes that an effective executive compensation program should provide base annual compensation that is reasonable in relation to an individual executive’s job responsibilities and reward the achievement of both annual and long-term strategic goals of our Company. The Compensation Committee uses annual and other periodic cash bonuses to reward an officer’s achievement of specific goals and employee stock options as a retention tool and as a means to align the executive’s long-term interests with those of our stockholders, with the ultimate objective of improving stockholder value. The Compensation Committee evaluates both performance and compensation to maintain our company’s ability to attract and retain excellent employees in key positions and to assure that compensation provided to key employees remains competitive relative to the compensation paid to similarly situated executives of comparable companies. To that end, the Compensation Committee believes executive compensation packages provided by us to our named executive officers should include both cash compensation and stock options.

Because of the size of our Company, the small number of executive officers in our Company, and our company’s financial priorities, the Compensation Committee has decided not to implement or offer any pension benefits, deferred compensation plans, or other similar plans for our named executive officers.

Role of Executive Officers in Compensation Decisions

The Compensation Committee makes all compensation decisions for the named executive officers and approves recommendations regarding equity awards to all of our officers. Decisions regarding the non-equity compensation of our other officers are made by our President and Chief Executive Officer.

The Compensation Committee and the President and Chief Executive Officer annually review the performance of each named executive officer (other than the President and Chief Executive Officer, whose performance is reviewed only by the Compensation Committee). The conclusions reached and recommendations based on these reviews with respect to salary adjustments and annual award amounts, are presented to the Compensation Committee. The Compensation Committee can exercise its discretion in modifying any recommended adjustments or awards to executives.

Setting Executive Compensation

Based on the foregoing objectives, the Compensation Committee has structured the Company’s annual cash and incentive-based cash and non-cash executive compensation to motivate our named executives to achieve the business goals set by the Company, to reward the executives for achieving such goals, and to retain the executives. In doing so, the Compensation Committee historically has not employed outside compensation consultants. The Compensation Committee utilizes data to set compensation for our executive officers at levels targeted at or around a range of compensation amounts provided to executives at comparable companies considering, for each individual, their individual experience level related to their position with us. There is no pre-established policy or target for the allocation between cash and non-cash incentive compensation.

2009 Executive Compensation Components

For 2009, the principal components of compensation for the named executive officers were:

•

base salary;

•

annual bonuses; and

•

equity incentive compensation.

Base Salary

The Company provides named executive officers and other employees with base salary to compensate them for services rendered during the year. Base salary ranges for the named executive officers and are determined for each named executive officer based on his position and responsibility.

During its review of base salaries for executives, the Compensation Committee primarily considers:

•

the negotiated terms of each executive employment agreement;

•

internal review of the executive’s compensation, both individually and relative to other named executive officers; and

•

individual performance of the executive.

Salary levels are typically considered annually as part of the Company’s performance review process, as well as upon a change in job responsibility. Merit-based increases to salaries are based on the Compensation Committee’s assessment of the individual’s performance. Base salaries for the named executive officers in 2009 were increased from the base salaries in effect during the prior year by amounts ranging from 8% to 40%.

Annual and Special Bonuses

The Compensation Committee has not established an incentive compensation program with fixed performance targets. Because we do not generate significant profits, the Compensation Committee bases its discretionary compensation awards on the achievement of milestones, effective fund-raising efforts, and effective management of personnel and capital resources, among other criteria. During 2009, a bonus of $50,000 was paid to each of the named Executive Officers.

Equity Incentive Compensation

As indicated above, the Compensation Committee also aims to encourage the Company’s executive officers to focus on long-term company performance by allocating to them stock options that vest over a period of several years. In 2009, the Compensation Committee granted to Mr. Francis a non-qualified common stock option to purchase 150,000 shares of our common stock at a price of $1.28 per share, which equaled the closing market price on the date of grant. The common stock option vests annually over three years, provided that Mr. Francis continues in our employ. In 2007, the Compensation Committee granted to Ms. Simon a nonqualified common stock option to purchase 300,000 shares of our common stock at a price of $7.00 per share, which equaled the closing market price on the date of grant. The common stock option vests annually over three years, provided that Ms. Simon continues in our employ. In 2007, in connection with the hiring of Matthew Natalizio as Chief Financial Officer, the Compensation Committee granted to Mr. Natalizio common stock options to purchase 340,000 shares of our common stock at a price of $7.00 per share, which equaled the closing market price on the date of grant. In addition, the Compensation Committee also granted to other executives common stock options that had an exercise price equal to the closing market price on the date of grant, and also vest annually over three years, provided that such executives remain in our employ through such annual vesting periods.

Retirement Plans, Perquisites and Other Personal Benefits

We have adopted a tax-qualified employee savings and retirement plan, the 401(k) Plan, for eligible United States employees, including our named executive officers. Eligible employees may elect to defer a percentage of their eligible compensation in the 401(k) Plan, subject to the statutorily prescribed annual limit. We may make matching contributions on behalf of all participants in the 401(k) Plan in an amount determined by our board of directors. Matching and profit-sharing contributions, if any, as well as all other contributions are at all times fully vested. We intend the 401(k) Plan, and the accompanying trust, to qualify under Sections 401(k) and 501 of the Internal Revenue Code so that contributions by employees to the 401(k) Plan, and income earned (if any) on plan contributions, are not taxable to employees until withdrawn from the 401(k) Plan, and so that we will be able to deduct our contributions, if any, when made. The trustee under the 401(k) Plan, at the direction of each participant, may invest the assets of the 401(k) Plan in any of a number of investment options.

We do not provide any of our executive officers with any other perquisites or personal benefits (what about reimbursement to Mitch and Kim for tax payments on perquisites, does this need to be disclosed?- it’s not mentioned in the employment agreements), other than benefits that we offer Mr. Francis and Ms. Simon in their employment agreements. As required by Mr. Francis’ employment agreement, during 2009 we paid insurance premiums with respect to life insurance policies for Mr. Francis which had a face value of approximately $5.3 million as of December 31, 2009 and under which Mr. Francis’ designee is the beneficiary. In addition, Mr. Francis receives a car allowance, car insurance, tax preparation, long term disability and health insurance for his spouse. As required by Ms. Simon’s employment agreement, during 2009, we paid a car allowance, car insurance, tax preparation, and medical insurance premiums.

Ownership Guidelines

The Compensation Committee has no requirement that each named executive officer maintains a minimum ownership interest in our company.

Our long-term incentive compensation consists solely of periodic grants of stock options to our named executive officers. The stock option program:

•

links the creation of stockholder value with executive compensation;

•

provides increased equity ownership by executives;

•

functions as a retention tool, because of the vesting features included in all options granted by the Compensation Committee; and

•

maintains competitive levels of total compensation.

We normally grant stock options to new executive officers when they join our company based upon their position with us and their relevant prior experience. The options granted by the Compensation Committee generally vest annually over the first three years of the ten-year option term. Vesting and exercise rights cease upon termination of employment (or, in the case of exercise rights, 90 days thereafter), except in the case of death (subject to a one-year limitation), disability or retirement. Prior to the exercise of an option, the holder has no rights as a stockholder with respect to the shares subject to such option, including voting rights and the right to receive dividends or dividend equivalents. In addition to the initial option grants, our Compensation Committee may grant additional options to retain our executives, and reward or provide incentive for the achievement of corporate goals and strong individual performance. Options are granted based on a combination of individual contributions to our company and on general corporate achievements, which may include the attainment of product development milestones and attainment of other annual corporate goals and objectives. On an annual basis, the Compensation Committee assesses the appropriate individual and corporate goals for our new executives and provides additional option grants based upon the achievement by the new executives of both individual and corporate goals. We expect that we will continue to provide new employees with initial option grants in the future to provide long-term compensation incentives and will continue to rely on performance-based and retention grants to provide additional incentives for current employees. Additionally, in the future, the Compensation Committee may consider awarding additional or alternative forms of equity incentives, such as grants of restricted stock, restricted stock units and other performance-based awards.

It is our policy to award stock options at an exercise price equal to The NASDAQ Capital Market’s closing price of our common stock on the date of the grant. In certain limited circumstances, the Compensation Committee may grant options to an executive at an exercise price in excess of the closing price of the common stock on the grant date. The Compensation Committee has never granted options with an exercise price that is less than the closing price of our common stock on the grant date, nor has it granted options which are priced on a date other than the grant date. For purposes of determining the exercise price of stock options, the grant date is deemed to be the first day of employment for newly hired employees, or the date on which the Compensation Committee or the Chief Executive Officer, as applicable, approves the stock option grant to existing employees.

We have no program, practice or plan to grant stock options to our executive officers, including new executive officers, in coordination with the release of material nonpublic information. We also have not timed the release of material nonpublic information for the purpose of affecting the value of stock options or other compensation to our executive officers, and we have no plan to do so. We have no policy regarding the adjustment or recovery of stock option awards in connection with the restatement of our financial statements, as our stock option awards have not been tied to the achievement of specific financial goals.

Tax and Accounting Implications

Deductibility of Executive Compensation

As part of its role, the Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, which provides that corporations may not deduct compensation of more than $1,000,000 that is paid to certain individuals. We believe that compensation paid to our executive officers generally is fully deductible for federal income tax purposes.

Accounting for Share-Based Compensation

Beginning on January 1, 2006, we began accounting for share-based compensation in accordance with the authoritative guidance of the Financial Accounting Standards Board. This accounting treatment has not significantly affected our compensation decisions. The Compensation Committee takes into consideration the tax consequences of compensation to the named executive officers, but tax considerations are not a significant part of the company’s compensation policy.

Compensation Committee Interlocks and Insider Participation in Compensation Decisions

There are no “interlocks,” as defined by the SEC, with respect to any member of the Compensation Committee. Messrs. Feirstein, Georges, and Pells served as the members of the Compensation Committee during 2009.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the “Compensation Discussion and Analysis” required by Item 402(b) of Regulation S-K and, based on such review and discussions, has recommended to our board of directors that the foregoing “Compensation Discussion and Analysis” be included in this Annual Report. Norman Feirstein, Sam Georges, and Andy Pells served as the members of the Compensation Committee during 2009.

The following table and text sets forth information with respect to the compensation paid to the Company’s senior executive officers during the years ended December 31, 2009, 2008, and 2007. Except as listed below, there are no bonuses, other annual compensation, restricted stock awards or stock options/SAR’s, or any other compensation paid to the named executive officers.

SUMMARY COMPENSATION TABLE

	Year Ended		Base				Stock		Option			Other			Total
	December		Salary		Bonus		Awards		Awards			Compensation			Compensation
Name and Principal Position	31,		$		$		$		$			$			$

Mitch Francis	2009			425,000		50,000		-		158,000	(1)		81,000	(2)		714,000
Chief Executive Officer,	2008			297,000		-		-		-			54,000	(2)		351,000
Chairman of the Board	2007			297,000		-		-		-			39,000	(2)		336,000

Kimberly Simon	2009			249,000		50,000		-		-			28,000	(4)		327,000
Chief Operating Officer	2008			243,000		-		-		-			17,000	(4)		260,000
	2007			225,000		21,000		-		1,600,000	(3)		10,000	(4)		1,856,000

Matthew Natalizio	2009			238,000		50,000		-		-			-			288,000
Chief Financial Officer	2008			215,000		-		-		-			-			215,000
	2007			62,000		-		-		1,600,000	(5)		-			1,662,000

Lee Marshall	2009	(6)		321,000		25,000		-		-			-			346,000
Co-CEO Tix Productions Inc (TPI)	2008	(7)		250,000		102,000		-		-			-			352,000

Steve Boulay	2009	(7)		189,000		-		-		-			3,000	(7)		192,000
Vice President, Marketing (TPI)	2008	(7)		149,000		-		-		-			3,000	(7)		152,000

John Ballard	2009	(7)		189,000		-		-		-			5,000	(7)		194,000
President, Tix Productions (TPI)	2008	(7)		149,000		-		-		-			4,000	(7)		153,000

(1) On March 1, 2009, the Company entered into a new written employment agreement with Mr. Francis, in conjunction with the agreement the Compensation Committee of the Company’s board of directors granted Mr. Francis a ten-year, nonqualified stock option to purchase 150,000 shares of our common stock at a price of $1.28 per share. The options vest in three installments of 50,000 shares each on March 1, 2010, 2011 and 2012, subject to Mr. Francis remaining in the continuous employ of the Company through such vesting dates. Upon termination of Mr. Francis’ employment agreement for any reason other than “cause” (as defined), any options not previously vested will immediately vest and be exercisable for a period of one year from the date of termination. The aggregate fair value of this common stock option at the grant date was $158,000, and was calculated using the Black Scholes option pricing model. For a discussion on the assumptions made in the valuation, refer to the Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements.

(2) In 2009, other compensation includes $4,000 of disability insurance premiums, $20,000 of automobile expense, $12,000 of life insurance premiums, $2,000 for personal tax consultation paid on behalf of Mr. Francis, $14,000 of company 401 (k) matching funds, and $29,000 in reimbursements for the payment of taxes. In 2008 this amount includes $8,000 of disability insurance premiums, $17,000 of automobile expense, $11,000 of life insurance premiums, $4,000 for personal tax consultation paid to or on behalf of Mr. Francis, and $11,000 of company 401(K) matching funds. In 2007 this amount includes $11,000 of disability insurance premiums, $18,000 of automobile expense, $7,000 of life insurance premiums and $4,000 for personal tax consultation paid to or on behalf of Mr. Francis.

(3) On September 27, 2007, the Company entered into a written employment agreement with Kimberly Simon, in conjunction with the agreement the Compensation Committee of the Company’s board of directors granted Ms. Simon a ten-year, nonqualified stock option to purchase 300,000 shares of our common stock at a price of $7.00 per share. The options vest in three installments of 100,000 shares each on September 1, 2008, 2009 and 2010, subject to Ms. Simon remaining in the continuous employ of the Company through such vesting dates. Upon termination of Ms. Simon’s employment agreement for any reason other than “cause” (as defined), any options not previously vested will immediately vest and be exercisable for a period of one year from the date of termination. The aggregate fair value of this common stock option at the grant date was $1.6 million, and was calculated using the Black Scholes option pricing model. For a discussion on the assumptions made in the valuation, refer to the Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements.

(4) For 2009, other compensation includes $7,000 of automobile expense, $1,000 for personal tax consultation paid on behalf of Ms. Simon, $12,000 of company 401 (k) matching funds, and $8,000 in reimbursements for the payment of taxes. For 2008, this amount includes $7,000 of automobile expense, $2,000 of medical insurance premiums and $8,000 of Company 401(k) matching funds. For 2007, this amount includes $7,000 of automobile expense, $2,000 of medical insurance premiums and $1,000 for personal tax consultation paid to or on behalf of Ms. Simon.

(5) In conjunction with his employment in September 2007, Mr. Natalizio was granted a ten-year, nonqualified option to purchase 340,000 shares of our common stock at a price of $7.00 per share, which equaled the closing market price of our common stock on the date Mr. Natalizio commenced service. The first 40,000 options vested immediately and the remaining 300,000 stock options vest annually over a three-year period, provided that Mr. Natalizio remains in our employ. The aggregate fair value of this common stock option at the grant date was $1.8 million, and was calculated using the Black Scholes option pricing model. For a discussion on the assumptions made in the valuation, refer to the Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements.

(6) In conjunction with the completion of the Merger with Magic Arts and Entertainment, we entered into an employment agreement with Lee D. Marshall, a founder of Magic, under which he will serve as the Co-Chief Executive Officer of TPI. The employment agreement commenced on February 29, 2008 and will expire on February 28, 2011, unless sooner terminated in accordance with the applicable provisions of the employment agreement. Under the employment agreement, Mr. Marshall is entitled to an annual salary of $300,000 that will increase by $25,000 each year during the term of the agreement. Mr. Marshall also is eligible to receive annual bonuses based upon TPI exceeding performance milestones specified in his employment agreement. For 2009 and 2008, the Company recorded $25,000 and $102,000, respectively, which was charged to operations as general and administrative expense.

(7) In conjunction with the completion of the Merger with NewSpace Entertainment, we entered into written employment agreements with John Ballard and Steve Boulay, pursuant to which they serve as Chief Operating Officer and Vice President - Marketing, respectively, at TPI. The term of each of the employment agreements commenced on March 11, 2008, and will expire on the third anniversary of such date, unless sooner terminated in accordance with applicable provisions of the employment agreements.

Mr. Ballard and Mr. Boulay are entitled under their respective employment agreements to an annual salary of $185,000. Each of Messrs. Ballard and Boulay are entitled to increases in their annual salaries of at least 3% per annum. For 2008 the salary amount represents salary from March 11, 2008 through December 31, 2008. Other compensation represents the Company’s 401(K) contribution match.

Grants of Plan-Based Awards for Fiscal Year 2009:

The following table details grants to our named executive officers during 2009:

Estimated Future Payouts

All Other

Under Non-Equity

Option Awards:

Incentive Plan Awards

Number of

Exercise

Grant Date

Target

Maximum

Securities

Price of

Fair Value

Grant

Bonus

Underlying

Option

of Option

Date

Payments

Options (1)

Awards

Awards (2)

Mitch Francis

4/3/2009

150,000

1.28

158,000

(1)

The options vest in three installments of 50,000 shares each on March 1, 2010, 2011 and 2012, subject to continued employment through such vesting dates.

(2)

The aggregate fair value of this common stock option at the grant date was calculated using the Black Scholes option pricing model. For a discussion on the assumptions made in the valuation, refer to the Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements.

Stock Option and Warrant Grants:

The following table sets forth information as of December 31, 2009 concerning unexercised options and warrants, unvested stock and equity incentive plan awards for the executive officers named in the Summary Compensation Table. For additional information related to stock options and the valuation of stock options, see footnote 11 to the consolidated financial statements.

OUTSTANDING EQUITY AWARDS AT YEAR ENDED DECEMBER 31, 2009

Option and Warrant Awards

Stock Awards

Equity

Incentive

Plan

Equity

Plan

Awards:

Incentive

Awards:

Market

Plan

Number

or Payout

Awards:

Value of

Number of

Market

Unearned

Securities

Number

Value of

Shares,

Underlying

of Shares

Shares or

Units or

Unexercised

Option

or Units

Units of

Other

Options

Unearned

and

Option

of Stock

Stock

Rights

and

Options

Warrant

and

That

Warrants

and

Exercise

Warrant

Have Not

(#)

Warrants

Price

Expiration

Vested

Name

Exercisable

Unexercisable

(#)

($)

Date

(#)

($)

(#)

($)

Mitch Francis

150,000

1.28

4-3-2019

Chief Executive Officer

Kim Simon

200,000

100,000

7.00

9-27-2017

Chief Operating Officer

100,000

0.36

2-27-2012

Matthew Natalizio

240,000

100,000

7.00

9-10-2017

Chief Financial Officer

Option and Warrant Exercises and Stock Vested:

The following table provides information regarding exercise of stock options and warrants by each of our named executive officers during 2009:

2009 EXERCISES OF PLAN-BASED AWARDS

	Number of		Value Realized
	Shares Acquired		on Exercise (1)
Name	on Exercise		($)

Kimberly Simon		150,000	$	214,500
Chief Operating Officer

Represents the difference between the exercise price and the fair market value of the common stock on the date of exercise of common stock options.

Quantification of Termination Payments and Benefits

The table below reflects the amount of compensation to each of our named executive officers in the event of termination of such executive’s employment without “cause” or his resignation for “good reason,” termination following a change in control, and termination upon the executive’s death or permanent disability. The named executive officers are not entitled to any payments other than accrued compensation and benefits in the event of their voluntary resignation. The amounts shown in the table below assume that such termination was effective as of December 31, 2009, and thus includes amounts earned through such time, and are estimates only of the amounts that would be payable to the executives. The actual amounts to be paid will be determined upon the occurrence of the events indicated.

TERMINATION PAYMENTS AND BENEFITS

		Termination Without Cause
		or for Good Reason
		Before Change		After Change						Change in
Name	Benefit	in Control ($)		in Control ($)		Death ($)		Disability ($)		Control ($)

Mitch Francis	Severance Payment (3)		975,000		2,250,000		-		-		-
Chief Executive Officer,	Stock Options (4)		-		69,000		-		-		-
Chairman of the Board	Health Insurance (1)		-		15,000		-		-		-
	Life Insurance (1)		-		18,000		-		-		-
	Disability Insurance (1)		-		6,000		-		-		-
	Automobile (2)		44,000		-		-		-		-

Kimberly Simon	Severance Payment (3)		175,000		1,312,000		-		-		-
Chief Operating Officer	Stock Options		-		-		-		-		-
	Health Insurance (1)		-		16,000		-		-		-
	Automobile (2)		15,000		-		-		-		-

Matthew Natalizio	Severance Payment (5)		125,000		125,000		-		-		-
Chief Financial Officer

Lee Marshall	Severance Payment (5)		163,000		163,000		-		-		-
Co-CEO Tix Productions

Steve Boulay	Severance Payment (5)		95,000		95,000		-		-		-
Chief Operating Officer,
Tix Productions

John Ballard	Severance Payment (5)		95,000		95,000		-		-		-
President, Tix Productions

(1)

Represents the cost as of December 31, 2009 for a period of eighteen months.

(2)

Represents the cost as of December 31, 2009 for the remaining term of the employment agreement. For Mitch Francis, the contract term ends February 28, 2012. For Kimberly Simon, the contract term ends August 31, 2010.

(3)

The Severance Payment in the Before Change in Control column represents salary paid through the end of the employment contract term. For Mitch Francis, the contract term ends February 28, 2012. For Kimberly Simon, the contract term ends August 31, 2010. The Severance Payment in the After Change in Control Payment column represents five times the annual base salary as of December 31, 2009, and is a lump sum payment no later than 30 days after employee’s date of termination.

(4)

Represents the aggregate value of stock options that vest and become exercisable immediately upon the triggering event, as if such event took place on December 31, 2009. The amount was determined as the aggregate difference between the stock price as of December 31, 2009 and the exercise price of the underlying options.

(5)

Amount is paid over a six month period in accordance with the Company's normal payroll practices.

Directors Compensation:

Beginning in July 2008, members of the Board of Directors who are not employees of the Company receive quarterly payments totaling $25,000 annually and reimbursement for any expenses incurred in attending the meetings. Also, beginning in April 2009, the Chairman of the Audit Committee receives an additional $20,000 annually and the Corporate Secretary receives an additional $6,000 annually. Further, in 2009, Messer Pells, Georges, Frankel, and Feirstein each received 25,000 common stock options with an exercise price of $1.25. In 2008 and 2007, Messrs Pells and Georges each received 25,000 common stock options and 10,000 common stock options, respectively. Directors who are employees of the Company receive no additional compensation for serving on the Board of Directors. The non-employee directors are eligible to participate in the 2004 Directors Option Plan.

Prior to July 2008, members of the Board of Directors who were not employees of the Company received $2,000 for each meeting they attended of the Board of Directors, and reimbursement for any expenses incurred in attending the meetings.

DIRECTOR COMPENSATION TABLE

				All Other
		Stock Awards		Compensation		Total
Name and Principal Position	Year	($)		($) (1) (2) (3)		($)

Andrew Pells - Director	2009		-		45,000		45,000
	2008		-		55,500		55,500
	2007		-		48,000		48,000

Benjamin Frankel - Director	2009		-		45,000		45,000
	2008		-		12,500		12,500
	2007		-		8,000		8,000

Norman Feirstein - Director	2009		-		49,500		49,500
	2008		-		12,500		12,500
	2007		-		8,000		8,000

Sam Georges - Director	2009		-		62,500		62,500
	2008		-		58,000		58,000
	2007		-		48,000		48,000

(1)

During the year ended December 31, 2009, the Company’s Board of Directors met on three occasions, of which two were telephonic and one was through video conference. Messrs. Georges and Feirstein attended all three meetings. Messrs. Pells and Frankel attended two meetings, of which one was telephonic and one was video conference. Non-employee directors of the Company received $6,250 per quarter. In addition, Mr. Georges received an additional $2,500 per quarter for chairing the audit committee until April 2009. Beginning in April 2009, Mr. Georges received an increase in compensation to $5,000 per quarter for chairing the audit committee and Mr. Feirstein received an additional $1,500 per quarter for performing the Corporate Secretary responsibilities. Messrs Pells, Georges, Frankel and Feirstein each received options to purchase 25,000 shares of our common stock, which management estimated the value to be $20,000 each using the Black-Scholes Model. For a discussion on the assumptions made in the valuation, refer to the Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements.

(2)

During the year ended December 31, 2008, the Company’s Board of Directors met on three occasions. Messrs. Frankel, Feirstein, Georges and Pells attended all three meetings. Directors received $2,000 per each meeting until July 2008, when their compensation was increased to $6,250 per quarter. In addition Sam Georges receives an additional $2,500 per quarter for chairing the audit committee. Andrew Pells and Sam Georges each received options to purchase 25,000 shares of our common stock, and management estimated the option value to be $43,000 using the Black-Scholes Model.

(3)

During the year ended December 31, 2007, the Company’s Board of Directors met on four occasions. Messrs. Frankel, Feirstein, and Georges attended all four meetings and received $2,000 for each meeting they attended. Mr. Pells attended one meeting and received $2,000 for his attendance and participation. During the year ended December 31, 2007 Messrs. Pells and Georges each received options to purchase 10,000 shares of our common stock. The stock options granted to Messrs. Pells and Georges had estimated value, using the Black-Scholes Model, of $46,000 and $40,000, respectively.

Long-Term Incentive Plans:

2009 Equity Incentive Plan:

On July 8, 2009, the 2009 Equity Incentive Plan (the “2009 Equity Plan”) for officers, employees and consultants of the Company was approved pursuant to a Joint Written Consent of the Board of Directors and Majority Stockholders of the Company. The 2009 Equity Plan authorized the granting of not more than 3,000,000 restricted shares, stock appreciation rights (“SAR’s”), and incentive and non-qualified stock options to purchase shares of the Company’s common stock. The 2009 Equity Plan provides that stock options or SAR’s granted can be exercisable immediately as of the effective date of the applicable agreement, or in accordance with a schedule or performance criteria as may be set in the applicable agreement. The exercise price for non-qualified stock options or SAR’s would be the amount specified in the agreement, but shall not be less than the fair value of the Company’s common stock at the date of the grant. The exercise price for incentive stock options cannot be less than the fair market value of the Company’s common stock on the date of grant (110% of the fair market value of the Company’s common stock on the date of grant for a stockholder owning in excess of 10% of the Company’s common stock).

During 2009, the Company’s board of directors granted options to purchase 25,000 shares of common stock under the 2009 Equity Plan. Further, options granted to Mr. Natalizio to purchase 340,000 shares of our common stock that were previously not under a Company Plan were transitioned and deemed to be grants under the newly adopted 2009 Equity Plan.

As of December 31, 2009, options to purchase 2,635,000 shares of common stock are reserved for issuance under the 2009 Equity Plan.

2004 Option Plan:

On March 3, 2005, the Company adopted the 2004 Stock Option Plan (the “2004 Option Plan”) for officers and employees of the Company or its subsidiaries. The 2004 Option Plan was approved pursuant to a Joint Written Consent of the Board of Directors and Majority Stockholders of the Company dated September 22, 2004. The 2004 Option Plan authorized the granting of incentive stock options and non-qualified stock options to purchase an aggregate of not more than 960,000 shares of the Company’s common stock. The 2004 Option Plan provided that options granted would generally be exercisable at any time during a ten-year period (five years for a stockholder owning in excess of 10% of the Company’s common stock) and vest one-third in each of the three years following the grant, unless otherwise provided by the plan administrator. The exercise price for non-qualified stock options would not be less than the par value of the Company’s common stock. The exercise price for incentive stock options would not be less than 100% of the fair market value of the Company’s common stock on the date of grant (110% of the fair market value of the Company’s common stock on the date of grant for a stockholder owning in excess of 10% of the Company’s common stock). No option may be exercised during the first six months of its term except in the case of death.

During the year ended December 31, 2009, the Company issued options to purchase 150,000 shares of common stock under the 2004 Option Plan. During the year ended December 31, 2008, the Company issued options to purchase 25,000 shares of common stock under the 2004 Option Plan. During the year ended December 31, 2007, the Company issued options to purchase 507,000 shares of common stock under the 2004 Option Plan. The Company issued 300,000 options under the 2004 Option Plan in 2006.

As of December 31, 2009, options to purchase 144,000 shares of common stock were reserved for issuance under the 2004 Option Plan.

2004 Directors Option Plan:

On March 3, 2005, the Company adopted the Directors Stock Option Plan (the “2004 Directors Option Plan”) for non-employee directors of the Company. The 2004 Directors Option Plan was approved pursuant to a Joint Written Consent of the Board of Directors and Majority Stockholders of the Company dated September 22, 2004. The 2004 Directors Option Plan authorized the granting of non-qualified stock options to purchase an aggregate of not more than 100,000 shares of the Company’s common stock. The 2004 Directors Option Plan provided that options granted would be exercisable for a period not to exceed ten years and vest one-third in each of the three years following the grant. The exercise price for non-qualified stock options would be the fair value of the Company’s common stock at the date of the grant. No option may be exercised during the first six months of its term except in the case of death. On May 30, 2007, an amendment to the 2004 Directors Option Plan was approved through a Corporate Resolution by the Company’s Board of Directors, and adjusts the vesting period of options granted from vesting one-third annually over three years to vesting immediately. On July 8, 2009, an additional amendment to the 2004 Directors Option Plan (“The Amendment”) was approved pursuant to a Joint Written Consent of the Board of Directors and Majority Stockholders of the Company. The Amendment increased the authorized amount of option grants to purchase shares of our common stock to 1,000,000 shares.

During 2009, the Company’s board of directors granted 25,000 options each to Messrs. Pells, Georges, Frankel, and Feirstein. The grant date fair value of the options granted to Messrs. Pells, Georges, Frankel, and Feirstein in 2009, as calculated using the Black Scholes Model, was $20,000 each. During 2008, the Company’s board of directors granted 25,000 options each to Messrs. Pells and Georges. The value of the options granted to Messrs. Pells and Georges in 2008, as calculated using the Black Scholes Model, was $43,000 each. During 2007, the Company’s board of directors granted 10,000 options to purchase our common stock to each of Messrs. Pells and Georges in conjunction with them becoming directors of Tix Corporation. The value of the options granted, as calculated using the Black Scholes Model, was $46,000 and $40,000, respectively. Prior to the above issuance, the Company had not granted any options under the 2004 Directors Option Plan.

A summary of stock options and warrants issued to officers, directors and employees as of December 31, 2009 is presented below:

	Stock Option and Warrant Value Table
							Value of Unexercised
	Number of Shares of				Weighted		in-the-Money Stock Options
	Common Stock Underlying				Average		and Warrants at
	Stock Options and Warrants				Exercise		Fiscal Year-End (1)
	Unvested		Vested		Price		Unvested		Vested

Option Plans:

Directors		-		170,000	$	2.18	$	-	$	49,000

Mitch Francis		150,000		-	$	1.28	$	69,000	$	-

Kimberly Simon		100,000		200,000	$	7.00	$		$

Matthew Natalizio		100,000		240,000	$	7.00	$	-	$	-

Curt Bechdel		50,000		75,000	$	6.09	$	2,250	$

Employees		22,000		44,000	$	6.85	$	-	$	-

Non-Plan Stock Options and Warrants:

Kimberly Simon - Warrants				100,000	$	0.36	$		$	138,000

(1) The dollar values are calculated by determining the difference between the weighted average exercise price of the stock options and warrants and the market price for the common stock of $1.74 per share at December 31, 2009.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

As used in this section, the term beneficial ownership with respect to a security is defined by Rule 13d-3 under the Securities Exchange Act of 1934, as amended, as consisting of sole or shared voting power (including the power to vote or direct the vote) and/or sole or shared investment power (including the power to dispose of or direct the disposition of) with respect to the security through any contract, arrangement, understanding, relationship or otherwise, subject to community property laws where applicable.

As of February 15, 2010, the Company had a total of 31,123,357 shares of common stock issued and outstanding, which is the only issued and outstanding voting equity security of the Company.

The following table sets forth, as of February 15, 2010: (a) the names and addresses of each beneficial owner of more than five percent (5%) of the Company's common stock known to the Company, the number of shares of common stock beneficially owned by each such person, and the percent of the Company's common stock so owned; and (b) the names and addresses of each director and executive officer, the number of shares of common stock beneficially owned, and the percentage of the Company's common stock so owned, by each such person, and by all directors and executive officers of the Company as a group. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

				Percent of
	Amount and			Shares of
	Nature of			Common Stock
	Beneficial			Outstanding
Name and Address of Beneficial Owner	Ownership			(2)

Mitch Francis (1)		3,589,474	(3)		11.2	%

Kimberly Simon (1)		968,109	(4)		2.8	%

Matthew Natalizio (1)		340,000	(6)		0.8	%

Benjamin Frankel (1)		324,000	(7)		1.0	%

Norman Feirstein (1)		455,000	(8)		1.5	%

Sam Georges (1)		70,000	(6)		0.2	%

Andy Pells (1)		60,000	(6)		0.2	%

Joe Marsh (1), (10)		4,650,301			14.9	%

Lee Marshall (1)		1,758,298			5.6	%

All directors and officers as a group (9 persons)		12,215,182	(5)		38.3	%

Christopher Maggiore (9)		1,810,625			5.8	%

(1) The address of each such person is c/o the Company, 12001 Ventura Place, Suite 340, Studio City, California 91604.

(2) The calculation is based on the number of shares of common stock outstanding on February 15, 2010, plus, with respect to each named person, the number of shares of common stock which the stockholder has the right to acquire upon exercise of stock options and warrants exercisable within 60 days of February 15, 2010.

(3) Includes 3,439,000 shares of common stock owned by Mr. Francis. Also includes an option to purchase 150,000 shares of the Company’s common stock. The balance excludes 255,000 shares of common stock owned by Sandra Francis, the wife of Mr. Francis, as to which Mr. Francis disclaims beneficial ownership.

(4) Includes 568,000 shares of common stock owned by Ms. Simon and 400,000 shares of common stock issuable upon exercise of stock options and warrants.

(5) Includes 11,188,000 shares of common stock owned by officers and directors, and 1,060,000 shares of common stock issuable upon exercise of stock options and warrants granted to officers and directors. Also excludes 255,000 shares of common stock owned by Sandra Francis, the wife of Mr. Francis, as to which Mr. Francis disclaims beneficial ownership.

(6) Messrs Pells and Georges were each granted options to purchase 35,000 shares of the Company’s common stock as a result of their directorships. In addition, Messrs Pells and Georges were each granted options to purchase 25,000 shares of the Company’s common stock in 2009. Mr. Georges separately purchased 10,000 shares of Tix common stock in the open market. Mr. Natalizio was granted 340,000 shares as a result of his appointment as Chief Financial Officer.

(7) Includes 299,000 shares of common stock owned by Mr. Frankel and 25,000 shares of common stock issuable upon exercise of stock options granted to Mr. Frankel.

(8) Includes 430,000 shares of common stock owned by Mr. Feirstein and 25,000 shares of common stock issuable upon exercise of stock options granted to Mr. Feirstein.

(9) The address of this person is 6860 Chillingsworth Circle, Canton, Ohio 44718.

(10) In connection with the acquisition of Exhibit Merchandising, the Company entered into a Voting Agreement with Joseph Marsh pursuant to which, for a period of four years, Mr. Marsh granted the Company, through its board of directors, the right to vote all of his shares, including the shares acquired pursuant to the Asset Purchase Agreement. As of the date hereof, such shares totaled 4,650,301.

Changes in Control:

The Company is unaware of any contract or other arrangement, the operation of which may at a subsequent date result in a change in control of the Company.

Information with respect to securities authorized for issuance under equity compensation plans is provided at "ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS - Securities Authorized for Issuance Under Equity Compensation Plans".

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

During 2007, Benjamin Frankel, a director of the Company, was a principal in Frankel, LoPresti & Co., an accountancy corporation. During the years ended December 31, 2009, 2008, and 2007, the Company incurred fees to such accounting firms for accounting and tax services of $55,000, $33,000, and $53,000, respectively.

Review, Approval or Ratification of Transactions with Related Persons

As provided in our audit committee charter, all related party transactions must be reviewed and approved by our audit committee. As such, we conduct a review of all related party transactions for potential conflicts of interest on an ongoing basis. All such transactions relating to executive officers and directors must be approved by our audit committee.

Director Independence

Our board of directors reviewed our directors’ responses to a questionnaire inquiring about their transactions, relationships and arrangements with us, as well as those of their immediate family members. The questionnaire also inquired as to other potential conflicts of interest. After reviewing this information, our board of directors determined that it is comprised of a majority of “independent directors,” as such term is defined in the NASDAQ rules and Rule 10A-3 of the Exchange Act. Among our six directors, Andy Pells, Norman Feirstein, Benjamin Frankel and Sam Georges meet the NASDAQ and the Exchange Act standards for independent directors except that Mr. Frankel does not meet the independence standards under the Exchange Act for members of the Audit Committee and is not a member of such Committee. The remaining directors, Mitch Francis and Joseph Marsh do not qualify as an independent director. Our independent directors did not engage in any transaction, or otherwise have relationship or arrangement with us that would compromise their independency as defined by the NASDAQ rules or Rule 10A-3 of the Exchange Act. Our Audit Committee is comprised of three independent directors, Messrs. Pells, Feirstein and Georges. Our Compensation Committee is comprised of three independent directors, Messrs. Pells, Feirstein and Georges. Our Nominating and Governance Committee is comprised of three independent directors, Messrs. Pells, Feirstein and Georges.

Additional information with respect to securities issued to the Company’s officers and directors in 2009, 2008, and 2007 is provided at “ITEM 11. EXECUTIVE COMPENSATION”.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit and Audit Related Fees:

Weinberg & Company, P.A. ("Weinberg") was the Company's independent registered public accounting firm for the years ended December 31, 2009, 2008, and 2007. Services provided to the Company by Weinberg with respect to such periods consisted of the audits of the Company's consolidated financial statements and limited reviews of the condensed consolidated financial statements included in Quarterly Reports on Form 10-Q. Weinberg & Co. also provided audit services with respect to our 2009 and 2008 Sarbanes-Oxley compliance, acquisition audits of Magic Arts & Entertainment, LLC and Exhibit Merchandising, LLC, and the subsequent filing of their financial statements on Form 8-K. Charges by Weinberg with respect to these matters aggregated $420,000, and $343,000, respectively, for the years ended December 31, 2009 and 2008.

Tax Fees:

Weinberg did not provide any services to the Company with respect to the preparation of corporate income tax returns or tax planning matters.

All Other Fees:

Weinberg did not provide any services with respect to any matters other than those related to audit and audit-related matters.

Pre-Approval Policies and Procedures:

The Audit Committee meets telephonically to periodically review and approve the scope of the services to be provided to the Company by its independent accountant, as well as to review and discuss any issues that may arise during an engagement. The Audit Committee considers various issues with respect to the services to be provided by the Company’s independent accountant, including the complexity of any engagement, its expected cost, the knowledge and expertise of the independent accountant's staff, any complex accounting or disclosure issues, new accounting pronouncements, and the capability of the Company's financial staff.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	Financial Statements

(1)

Consolidated Financial Statements and Supplementary Data at Item 8

(2)

Financial Statement Schedules at Schedule II – Valuation and Qualifying Accounts.

(b)

Exhibits

A list of exhibits required to be filed as part of this report is set forth in the Index to Exhibits, which immediately precedes such exhibits, and is incorporated herein by reference.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TIX CORPORATION
	(Registrant)

Date: March 16, 2010	By:	/s/ MITCH FRANCIS
		Mitch Francis
		Chief Executive Officer, President,
		and Chairman of the Board of Directors

In accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: March 16, 2010	By:	/s/ MATTHEW NATALIZIO
		Matthew Natalizio
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Date: March 16, 2010	By:	/s/ BENJAMIN FRANKEL
		Benjamin Frankel
		Director

Date: March 16, 2010	By:	/s/ NORMAN FEIRSTEIN
		Norman Feirstein
		Director

Date: March 16, 2010	By:	/s/ SAM GEORGES
		Sam Georges
		Director

Date: March 16, 2010	By:	/s/ ANDREW PELLS
		Andrew Pells
		Director

Date: March 16, 2010	By:	/s/ JOSEPH MARSH
		Joseph Marsh
		Director

TIX CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		PAGE

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2009 and 2008		F-3

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2009, 2008 and 2007		F-4

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2009, 2008, and 2007		F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008, and 2007		F-6

Notes to Consolidated Financial Statements		F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors

Tix Corporation

We have audited the accompanying consolidated balance sheets of Tix Corporation and Subsidiaries (the “Company”) as of December 31, 2009 and 2008, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2009. Our audits also included the financial statement schedules on pages F-28 and F-29. We have also audited the Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organization of the Treadway Commission. The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and the financial statement schedules and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. An audit of the consolidated financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel 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. A company’s internal control over financial reporting 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 the company; (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 receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tix Corporation and Subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Weinberg & Company, P.A.

Los Angeles, California

March 12, 2010

F-2

TIX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2009			2008

Assets
Current assets:
Cash	$	9,885,000		$	9,192,000
Accounts receivable, including show revenues earned but not billed		1,911,000			1,104,000
Advances to vendors		964,000			118,000
Inventory, net		2,172,000			3,320,000
Prepaid expenses and other current assets		1,350,000			749,000
Total current assets		16,282,000			14,483,000

Property and equipment:
Office equipment and furniture		2,191,000			1,816,000
Equipment under capital lease		408,000			408,000
Leasehold improvements		394,000			364,000
Property and equipment		2,993,000			2,588,000
Less accumulated depreciation		(1,685,000	)		(1,155,000	)
Total property and equipment, net		1,308,000			1,433,000

Other assets:
Intangible assets:
Goodwill		5,895,000			5,639,000
Intangibles, net		4,499,000			6,408,000
Total intangible assets		10,394,000			12,047,000
Investments in and advances to nonconsolidated affiliates		1,052,000			343,000
Capitalized theatrical costs		368,000			459,000
Deposits and other assets		158,000			83,000
Total other assets		11,972,000			12,932,000
Total assets	$	29,562,000		$	28,848,000

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	6,357,000		$	4,822,000
Accrued expenses		1,797,000			1,315,000
Current portion of capital lease obligations		60,000			51,000
Deferred revenue		160,000			100,000
Income taxes payable		-			200,000
Total current liabilities		8,374,000			6,488,000

Non-current liabilities:
Capital lease obligations, less current portion		17,000			78,000
Deferred rent		43,000			85,000
Total non-current liabilities		60,000			163,000

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $.01 par value; 500,000 shares authorized; none issued
Common Stock, $.08 par value; 100,000,000 shares authorized; 31,123,357 shares net of 2,340,103 treasury shares, and 32,345,863 shares net of 732,370 treasury shares issued at December 31, 2009 and December 31, 2008 respectively		2,678,000			2,646,000
Additional paid-in capital		89,955,000			88,062,000
Cost of shares held in treasury		(4,610,000	)		(2,098,000	)
Accumulated deficit		(66,902,000	)		(66,384,000	)
Accumulated other comprehensive loss		7,000			(29,000	)
Total stockholders’ equity		21,128,000			22,197,000
Total liabilities and stockholders’ equity	$	29,562,000		$	28,848,000

See accompanying notes to the consolidated financial statements.

F-3

TIX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	Years Ended December 31,
	2009			2008			2007

Revenues	$	81,791,000		$	69,545,000		$	18,567,000
Operating expenses:
Direct costs of revenues		60,901,000			48,752,000			11,672,000
Selling and marketing expenses		2,520,000			3,008,000			13,475,000
General and administrative expenses, including non-cash equity-based costs of $1,715,000, $2,336,000, and $3,284,000 in 2009, 2008, and 2007, respectively (including $1,371,000, $1,753,000, and $682,000 for officers, directors and employees in 2009, 2008, and 2007, respectively)		14,031,000			14,931,000			8,117,000
Impairment of goodwill		-			25,445,000			-
Impairment of intangible assets		-			7,687,000			-
Depreciation and amortization		2,496,000			4,601,000			1,668,000
Total costs and expenses		79,948,000			104,424,000			34,932,000
Income (loss) from operations		1,843,000			(34,879,000	)		(16,365,000	)
Other income (expense):
Equity in losses of nonconsolidated affiliates		(2,644,000	)		-			-
Other income		296,000			175,000			28,000
Interest income		40,000			59,000			96,000
Interest expense		(13,000	)		(19,000	)		(104,000	)
Other income, net		(2,321,000	)		215,000			20,000
Loss before income tax expense		(478,000	)		(34,664,000	)		(16,345,000	)
Income tax expense		40,000			-			-
Net loss		(518,000	)		(34,664,000	)		(16,345,000	)
Other comprehensive income (loss):
Foreign currency translation adjustments		36,000			(29,000	)		-
Comprehensive loss	$	(482,000	)	$	(34,693,000	)	$	(16,345,000	)

Net loss per common share – basic and diluted	$	(0.02	)	$	(1.08	)	$	(0.70	)

Weighted average common shares outstanding – basic and diluted		32,388,829			31,962,375			23,446,349

See accompanying notes to the consolidated financial statements.

F-4

TIX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31, 2009, 2008, AND 2007

															Accumulated
						Additional									Other			Total
	Common Stock					Paid In			Accumulated			Treasury			Comprehensive			Stockholders’
	Shares			Amount		Capital			Deficit			Stock			Loss			Equity

Balance, January 1, 2007		18,440,305		$	1,475,000	$	14,278,000		$	(15,375,000	)	$	-		$	-		$	378,000

Issuance of common stock to consultants		1,601,924			128,000		8,764,000												8,892,000

Issuance of common stock to officers and employees		316,668			25,000		657,000												682,000

Issuance of common stock upon exercise of warrants and options		1,161,912			93,000		136,000												229,000

Issuance of common stock for acquisition of Any Event		137,500			11,000		539,000												550,000

Issuance of common stock for acquisition of Exhibit Merchandising		5,000,000			400,000		34,600,000												35,000,000

Fair value of options issued to employees		-			-		1,136,000												1,136,000

Fair value of options and warrants issued to consultants		-			-		3,440,000												3,440,000

Sale of common stock		3,744,016			300,000		17,484,000												17,784,000

Net loss										(16,345,000	)								(16,345,000	)

Balance, December 31, 2007		30,402,325			2,432,000		81,034,000			(31,720,000	)		-			-			51,746,000

Issuance of common stock to consultants		85,564			7,000		417,000												424,000

Issuance of common stock to officers and employees		216,667			17,000		30,000												47,000

Issuance of common stock upon exercise of warrants and options		1,326,059			106,000		(52,000	)											54,000

Fair value of options issued to employees and directors		-			-		1,706,000												1,706,000

Issuance of common stock for acquisition of Magic Arts & Entertainment		476,190			38,000		2,219,000												2,257,000

Issuance of common stock for acquisition of NewSpace Entertainment		571,428			46,000		2,549,000												2,595,000

Fair value of warrants issued to outside consultants		-			-		159,000												159,000

Net Loss										(34,664,000	)								(34,664,000	)

Foreign currency translation adjustment																(29,000	)		(29,000	)

Cost of Treasury Stock		(732,370	)										(2,098,000	)					(2,098,000	)

Balance, December 31, 2008		32,345,863			2,646,000		88,062,000			(66,384,000	)		(2,098,000	)		(29,000	)		22,197,000

Issuance of common stock to consultants		50,000			5,000		114,000												119,000

Issuance of common stock to officers and employees		38,194			3,000		5,000												8,000

Issuance of common stock upon exercise of warrants and options		106,557			9,000		(55,000	)											(46,000	)

Fair value of options issued to employees and directors							1,363,000												1,363,000

Issuance of common stock related to acquisition of Magic Arts & Entertainment		190,476			15,000		241,000												256,000

Fair value of warrants issued to outside consultants							225,000												225,000

Net loss										(518,000	)								(518,000	)

Foreign currency translation adjustment																36,000			36,000

Cost of Treasury Stock		(1,607,733	)										(2,512,000	)					(2,512,000	)

Balance, December 31, 2009		31,123,357		$	2,678,000	$	89,955,000		$	(66,902,000	)	$	(4,610,000	)	$	7,000		$	21,128,000

See accompanying notes to the consolidated financial statements.

F-5

TIX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

	Years Ended December 31,
	2009			2008			2007

Cash flows from operating activities:
Net loss	$	(518,000	)	$	(34,664,000	)	$	(16,345,000	)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation		530,000			491,000			294,000
Impairment of goodwill		-			25,445,000			-
Impairment of intangible assets		-			7,687,000			-
Amortization of intangible assets		1,966,000			4,110,000			1,375,000
Fair valued common stock issued for services to employees		8,000			47,000			682,000
Fair valued common stock issued for services to consultants		119,000			395,000			8,892,000
Fair value of options issued to employees and directors		1,363,000			1,706,000			1,136,000
Fair value of warrants issued to consultants		225,000			159,000			3,440,000
Change in allowance of inventory		(45,000	)		(44,000	)		-
Equity in losses of nonconsolidated affiliates		2,644,000			-			-
(Increase) decrease in:
Accounts receivable		(807,000	)		(456,000	)		(408,000	)
Advances to vendors		(846,000	)		(66,000	)		(52,000	)
Advances to nonconsolidated affiliates		(766,000	)		-			-
Inventory		1,193,000			1,077,000			(56,000	)
Prepaid expenses and other current assets		(601,000	)		(202,000	)		107,000
Capitalized theatrical costs, deposits and other assets		16,000			(469,000	)		(7,000	)
Increase (decrease) in:
Accounts payable and accrued expenses		1,948,000			2,219,000			1,019,000
Income taxes payable		(200,000	)		200,000			-
Deferred revenue		60,000			38,000			53,000
Deferred rent		(42,000	)		(103,000	)		14,000
Net cash provided by operating activities		6,247,000			7,570,000			144,000

Cash flows from investing activities:
Investment in nonconsolidated affiliates		(2,644,000	)		-			-
Purchases of Domain Names		-			-			(132,000	)
Purchases of property and equipment		(405,000	)		(454,000	)		(678,000	)
Purchase of Exhibit Merchandising		-			-			(11,436,000	)
Purchase of Magic Arts & Entertainment, net of cash acquired		-			(1,971,000	)		-
Purchase of NewSpace Entertainment, net of cash acquired		-			(1,254,000	)		-
Purchase of ticket inventory from AnyEvent		-			-			(96,000	)
Purchase of AnyEvent		-			-			(300,000	)
Net cash used in investing activities		(3,049,000	)		(3,679,000	)		(12,642,000	)

Cash flows from financing activities:
Proceeds from note payable, stockholder		-			-			2,000,000
Repayment of note payable, stockholder		-			-			(2,000,000	)
Proceeds from common stock subscription		-			-			17,784,000
Cost of Treasury Stock		(2,512,000	)		(2,098,000	)		-
Payments on capital lease obligations		(52,000	)		(46,000	)		(41,000	)
Net proceeds from exercise of options and warrants		23,000			54,000			229,000
Net cash (used in) provided by financing activities		(2,541,000	)		(2,090,000	)		17,972,000

Effect of exchange rate changes on cash		36,000			(26,000	)		-

Change in Cash:
Net increase		693,000			1,775,000			5,474,000
Balance at beginning of period		9,192,000			7,417,000			1,943,000
Balance at end of period	$	9,885,000		$	9,192,000		$	7,417,000

Supplemental disclosures of cash flow information:

Cash paid for:
Income taxes	$	604,000		$	-		$	-
Interest	$	13,000		$	19,000		$	104,000

Non-cash investing activities:
Issuance of earn-out shares of 190,476 and originally issued 476,190 shares of common stock in conjunction with the acquisition of Magic Arts & Entertainment – Florida, Inc. in 2009 and 2008 respectively	$	256,000		$	2,257,000		$	-
Issuance of 571,428 shares of common stock in conjunction with the acquisition of NewSpace Entertainment, Inc.	$	-		$	2,595,000		$	-
Issuance of 137,500 shares of common stock in conjunction with acquisition of John’s Tickets, LLC	$	-		$	-		$	550,000
Issuance of 5 million shares of common stock in conjunction with the acquisition of Exhibit Merchandising, LLC	$	-		$	-		$	35,000,000

Non-cash financing activities:
Issuance of common stock to officers		-			-			671,000
Issuance of common stock as payment for accrued bonus		-			29,000			-
Equipment acquired through capital lease		-			22,000			-
Exercise of options	$	69,000		$	-		$	-

See accompanying notes to the consolidated financial statements.

F-6

TIX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2009, 2008, and 2007

Organization and Basis of Presentation

Tix Corporation (the “Company”) was incorporated in Delaware in April 1993 under the name Cinema Ride, Inc. The Company changed its name from Cinema Ride, Inc. to Tix Corporation (Tix), effective March 3, 2005. Tix is an integrated entertainment company focusing on ticketing services, event merchandising, and the production and promotion of live entertainment. We operate three complementary business units: Tix4Tonight, Exhibit Merchandising (EM), and Tix Productions Inc. (TPI).

Operating Segments

Ticketing Services

Tix4Tonight dba AnyEvent, a national event ticket broker, sells premium tickets for sporting events, concerts, tours, and theatre. Any Event operations are located in the administrative offices of Tix4Tonight.

Tix4Tonight expanded our market reach through the development of a new targeted marketing channel which includes a national, online, branded discount ticket portal called Tix4Members.com. In February 2009, Tix4Members launched its first co-branded discount website with Costco Event Ticket Services. However, revenues from the Costco arrangement had been minimal. As a result, we terminated the Costco arrangement effective October 2009. The Company believes in this strategy of selling discount tickets to concerts, live theater, and sporting events to membership group members through co-branded websites and continues to seek additional partners. As with our Tix4Tonight operation in Las Vegas, Tix4Members.com offers a marketing channel for producers, presenters, artists, arenas and theaters nationwide to take advantage of our strong position in the discounted ticket sales and live entertainment industry. Tix4Members.com operates in a manner similar to Tix4Tonight with a few key differences. Instead of relying on physical ticket booth facilities for direct sales, Tix4Members uses the internet as its customer interface, and instead of offering only discounted day of show tickets, it has expanded the date range of its discount ticket availability to concerts, theatre shows and sporting events. Tix4Members’ revenues are dependent in part on sporting events and special concerts occurring, such as boxing matches and reunion tours, as well as our ability to obtain tickets to these events.

Exhibit and Event Merchandising

The Company provides exhibit and event merchandising through its wholly owned subsidiary Exhibit Merchandising LLC (EM). EM provides retail specialty stores for touring museum exhibitions and touring theatrical productions. EM provides a complete turnkey retail store with commercially-available and extensive custom-branded product for sale in addition to professional management that complements the exhibition or theatrical production it represents. It operates the stores in space rented in conjunction with the exhibit. To date, revenues from the management of retail outlets associated with the sale of merchandise related to touring exhibits have been primarily derived from “Tutankhamun and The Golden Age of the Pharaohs” and “Tutankhamun the Golden King and the Great Pharaohs.”

Live Entertainment

In December 2007, we announced that we had entered into letters of intent to acquire two live theatrical and concert production companies: Magic Arts & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace). As part of the letters of intent, the managements of Magic and NewSpace agreed to manage the operations of their respective companies for the benefit of Tix Corporation from January 2, 2008 until the transactions were finalized. The managements of Magic and NewSpace were required to consult and obtain the approval of the management of Tix Corporation prior to entering into any long term arrangements or transactions that were outside the normal course of business. Further, Tix Corporation assumed all responsibility for any profits or losses that might be incurred during this period by both Magic and NewSpace. The acquisition of Magic was completed on February 29, 2008 and the acquisition of NewSpace was completed on March 12, 2008. In May of 2008, we combined the operations of these two entertainment companies into our newly-formed, wholly-owned subsidiary Tix Productions Inc. We believe that by combining the operations of these two companies into a single entity, we have been better able to leverage resources, gain operating efficiencies, and more fully utilize their combined experience with venues, producers and promoters. NewSpace and Magic continue to operate under their previous names and will for the foreseeable future as a reflection of the equity and marketplace recognition those entities have.

F-7

As a live entertainment presenter, we book touring theatrical and concert presentations with a history of successful commercial appeal as well as participate in the development and roll out of new theatrical and concert presentations often originating on Broadway in New York or the West End in London. We use a wide variety of marketing channels to sell tickets to these programs including our substantial subscriber-based businesses in eleven US cities, our Salt Lake City based group sales team, and traditional marketing tools including print, radio, television, outdoor and internet-focused marketing tools. In addition, we invest in shows or productions in advance of their initial tours to obtain favorable presentation and merchandising rights.

Summary of Significant Accounting Policies

Revenue Recognition, Presentation and Concentrations

The Company has several streams of revenue, each of which is required under Generally Accepted Accounting Principles (GAAP) to be recognized in varying ways. The following is a summary of our revenue recognition policies:

Tix4Dinner offers reservations for discounted dinners at various restaurants surrounding the Las Vegas strip and downtown with dining at specific times on the same day or in some cases the day after the sale. Tix4Dinner recognizes as revenue the transaction fees earned from the booking of dinner reservations at the time that the reservations are made and a subsequent nominal fee from the restaurant at the time the reservation is used. At this time, the Company has immaterial amounts of accounts receivable and does not have any accounts payable associated with the Tix4Dinner operations, as the Company collects the transaction fee at the time that the reservation is made, and the dinner payment is collected directly by the restaurant.

AnyEvent recognizes as revenue the gross amount from the sale of tickets that it owns. AnyEvent bears the risk of economic loss if the tickets are not sold by the date that the event is scheduled to occur. Revenue is considered earned when the related event has occurred. Refunds are only issued if the event is canceled or postponed. Payments for such ticket sales received prior to the event are recorded as deferred revenue. AnyEvent does not have any accounts receivable associated with sales transactions to individual customers, as payment is collected at the time of sale. However, sales transactions with other ticket brokers may be conducted on a credit basis, which would generate accounts receivable.

Tix4Members.com recognizes as revenues the commissions and related transaction fees from the sale of tickets when the related event has occurred. Refunds are only issued if the event is canceled or postponed. Payments for such ticket sales received prior to the event are recorded as deferred revenue. Claims for ticket refunds, which will be generally received and paid the day after the show date, are charged back to the respective shows and recorded as a reduction to the Company’s commissions and fees at the time that such refunds are processed. Tix4Members does not have any accounts receivable associated with sales transactions to individual customers because payment is collected at the time of sale.

Exhibit Merchandising recognizes retail store sales at the time the customer takes possession of the merchandise. Sales are recorded net of discounts and returns and exclude sales tax. Discounts are estimated based upon historical experience. For online sales, revenue is recognized free on board ("FOB") origin where title and risk of loss pass to the buyer when the merchandise leaves the Company's distribution facility at the time of shipment, which we refer to as the date of purchase by the customer. Sales are recognized net of merchandise returns, which are reserved for based on historical experience. Shipping and handling revenues from sales are included as a component of net sales. Conversely, shipping and handling costs are a component of direct cost of revenues. The Company does not have any accounts receivable associated with this business, as all transactions are done by credit card.

F-8

On January 2, 2008, the Company began its live entertainment business. Revenue from the presentation and production of an event is recognized after the performance occurs. Revenue from our producing and presenting activities are reported in accordance with the authoritative guidance of the Financial Accounting Standards Board, which provides guidance that the following items are indicators as to whether something should be recorded at gross or net:

Acts as principal in the transaction

Has risk and rewards of ownership, such as risk of loss for collection, delivery and returns, and

Takes title to the products

Selects the supplier

Flexibility in pricing

Assumes credit risk

Tix Productions Inc.’s (TPI) operating units Magic Arts & Entertainment and NewSpace act as both presenter and promoters of productions, as well as agent. TPI’s revenues from live entertainment where it is acting as the producer or promoter are a function of a number of elements; revenue is a direct reflection of tickets sold times ticket prices plus ancillary revenue streams including sponsorships and revenues generated through premium ticketing opportunities. In instances where the Company acts as the presenter or promoter, it:

selects the suppliers or approves the selection of the supplier,

is the primary obligor with suppliers,

assumes credit risk,

directs the pricing of the tickets, and

purchases the advertising.

TPI revenues collected in advance of an event are recorded as deferred revenues until the event occurs. Revenue collected from sponsorship and other revenue, which is not related to any single event, is classified as deferred revenue and generally amortized over the tour’s season or the term of the contract. We account for taxes that are externally imposed on revenue producing transactions on a net basis, as a reduction to revenue.

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation.

Inventory

We record inventories at the lower of cost (FIFO basis) or market value. We assess the value of our inventories periodically based upon numerous factors including expected product or material demand, current market conditions, current cost and net realizable value. If necessary, we write down our inventory for estimated obsolescence, potential shrinkage, or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions.

F-9

Business Combinations

We allocate the purchase price of acquired companies to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the purchase price over these fair values is recorded as goodwill. We engage independent third-party appraisal firms to assist us in determining the fair values of assets acquired and liabilities assumed. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. The significant purchased intangible assets recorded by Tix include customer contracts and trade names.

Critical estimates in valuing certain intangible assets include but are not limited to: future expected cash flows from customer contracts, customer lists, distribution agreements, and intellectual property; estimating cash flows from projects when completed, and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Property and Equipment

Property and equipment are stated at cost or fair value at date of acquisition. Depreciation which is recorded for both owned assets and assets under capital leases, at the time property and equipment is placed in service using the straight-line method over the estimated useful lives of the related assets, which range from four to ten years. Leasehold improvements are amortized over the shorter of the expected useful lives of the related assets or the lease term.

Stock-Based Compensation

The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete.

We estimate volatility and forfeitures based upon historical data. As permitted by the authoritative guidance issued by the Financial Accounting Standards Board, we use the “simplified” method to determine the expected life of an option grant due to the Company’s lack of sufficient historical exercise data to provide a reasonable basis, which is a result of the relative high turnover rates experienced in the past for positions granted options. All of these variables have an effect on the estimated fair value of our share-based awards.

Intangible Assets and Goodwill

The Company accounts for intangible assets and goodwill in accordance with the authoritative guidance issued by the Financial Accounting Standards Board. Intangibles are valued at their fair market value and are amortized taking into account the character of the acquired intangible asset and the expected period of benefit. The Company evaluates intangible assets and goodwill for impairment, at a minimum, on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated undiscounted future cash flows. Recoverability of intangible assets is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors, including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. During the year ended December 31, 2008, we recorded an impairment charge of $33.1 million related to goodwill and intangible assets related to the assets acquired from our acquisition of Exhibit Merchandising, LLC. There were no indications of impairment based on managements’ assessment at December 31, 2009 or 2007. Factors we consider important that could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of the use of our assets or the strategy for our overall business, and significant negative industry or economic trends. If current economic conditions worsen causing decreased revenues and increased costs, we may have further goodwill impairments.

Income Taxes

Current income tax expense is the amount of income taxes expected to be payable for the current year. A deferred income tax asset or liability is established for the expected future consequences of temporary differences in the financial reporting and tax basis of assets and liabilities. The Company considers future taxable income and ongoing, prudent and feasible tax planning strategies, in assessing the value of its deferred tax assets. If the Company determines that it is more likely than not that these assets will not be realized, the Company will reduce the value of these assets to their expected realizable value, thereby decreasing net income. Evaluating the value of these assets is necessarily based on the Company’s judgment. If the Company subsequently determined that the deferred tax assets, which had been written down, would be realized in the future, the value of the deferred tax assets would be increased, thereby increasing net income in the period when that determination was made.

F-10

The Company prescribes a recognition threshold and a measurement attributable for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized.

Fair Value Measurements

The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Financial assets recorded at fair value in the consolidated balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. Authoritative guidance provided by the FASB defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company's assumptions.

Cash Concentrations

The Company's cash balances on deposit with banks in the United States (US) are guaranteed up to $250,000 by the Federal Deposit Insurance Corporation (the “FDIC”). The Company may periodically be exposed to risk for the amount of funds held in one bank in excess of the insurance limit. In order to control the risk, the Company's policy is to maintain cash balances with high quality financial institutions. The Company had cash balances with a bank in excess of the insurance limit as of December 31, 2009, 2008, and 2007. At December 31, 2009, the Company’s aggregate cash in excess of the FDIC insured amount was $8.3 million. In addition, the Company had aggregate cash balances in Canada of $286,000, which is $194,000 in excess of this country’s equivalent of the US FDIC guarantee.

Foreign Currency

Results of foreign operations are translated into U.S. dollars using the average exchange rates during the year. The assets and liabilities of those operations are translated into U.S. dollars using the exchange rates at the balance sheet date. Exchange gains and losses were minor in 2009, 2008, and 2007. The Company began operating in the United Kingdom in November 2007, with the opening of its exhibit shop at the O2 for “Tutankhamun and The Golden Age of the Pharaohs.” Additionally, in March 2008, the Company opened a second exhibit shop in Vienna, Austria for “Tutankhamun and the World of the Pharaohs.” In November 2009, the Company opened an exhibit shop in Toronto, Canada. Foreign currency gains and losses are included in operations.

Net Income (Loss) Per Common Share

Basic net income per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. The diluted earnings per share calculation gives effect to all potentially dilutive common shares outstanding during the period using the treasury stock method. These potentially dilutive securities were not included in the calculation of loss per share for the years ended December 31, 2009, 2008 and 2007, because the Company incurred a loss during those periods and thus their effect would have been anti-dilutive. Accordingly, basic and diluted loss per share is the same for the years ended December 31, 2009, 2008 and 2007. At December 31, 2009, 2008 and 2007, potentially dilutive securities consisted of outstanding warrants and stock options to acquire an aggregate of 2,201,000, 3,935,000 and 5,261,000 shares, respectively.

Issued but unvested shares of common stock are excluded from the calculation of basic earnings per share, but are included in the calculation of diluted earnings per share, when dilutive.

Comprehensive Income (Loss)

The Company reports comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. This include all changes in equity except those resulting from investments by owners and distributions to owners, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on marketable securities. During the years ended December 31, 2009 and 2008, the Company had a comprehensive gain of $36,000 and comprehensive loss of $29,000, respectively. The Company did not have items of comprehensive income (loss) for the year ended December 31, 2007.

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-11

Advertising Costs

Advertising costs are charged to operations as selling and marketing expenses at the time the costs are incurred. Advertising costs for the years ended December 31, 2009, 2008, and 2007 were $1.8 million, $4.4 million, and $823,000, respectively.

Impairment of Long-Lived Assets

Authoritative guidance issued by the Financial Accounting Standards Board established guidelines regarding when impairment losses on long-lived assets, which include property and equipment, should be recognized, and how impairment losses should be measured. Authoritative guidance from the Financial Accounting Standards Board also provided a single accounting model for long-lived assets to be disposed of and significantly changed the criteria that would have to be met to classify an asset as held-for-sale.

Management regularly reviews property, equipment and other long-lived assets for possible impairment. This review occurs quarterly, or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. If there is indication of impairment, then management prepares an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. Management believes that the accounting estimate related to impairment of its property and equipment is a “critical accounting estimate” because: (1) it is highly susceptible to change from period to period because it requires management to estimate fair value, which is based on assumptions about cash flows and discount rates; and (2) the impact that recognizing an impairment would have on the assets reported on the Company’s balance sheet, as well as net income, could be material. Management’s assumptions about cash flows and discount rates require significant judgment because actual revenues and expenses have fluctuated in the past and are expected to continue to do so. There were no indications of impairment based on management’s assessment at December 31, 2009. At December 31, 2008, Tix’s management recorded impairment charges to goodwill and intangible assets of $25.4 million and $7.7 million, respectively. There can be no assurance that future goodwill impairments will not occur. There were no impairments of goodwill or intangible assets in 2007.

Changes in forecasted operations can materially affect these estimates. Once an impairment of goodwill or other intangible assets has been recorded, it cannot be reversed.

Investments in Nonconsolidated Affiliates

The Company has investments in various nonconsolidated affiliates. Investments in nonconsolidated affiliates in which the Company owns between 20% to 50% of the voting common stock or otherwise exercises significant influence over the operating and financial policies of the nonconsolidated affiliate are accounted for using the equity method. Under this method, the Company records its investments in these entities on the balance sheet based upon its investments and contributions, and adjusts its basis for the Company’s pro rata share of earnings or losses, which is reflected in its consolidated statement of operations. Investments in nonconsolidated affiliates in which the Company owns less than 20% of the voting common stock are accounted for using the cost method of accounting.

Reclassifications

In presenting the Company’s consolidated balance sheet at December 31, 2008, the Company has presented $343,000 of investments in nonconsolidated affiliates that were previously included with intangible assets.

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board ("FASB") amended its guidance on accounting for variable interest entities ("VIE"). Among other things, the new guidance requires a qualitative rather than a quantitative analysis to determine the primary beneficiary of a VIE; requires continuous assessments of whether an enterprise is the primary beneficiary of a VIE; enhances disclosures about an enterprise's involvement with a VIE; and amends certain guidance for determining whether an entity is a VIE. Under the new guidance, a VIE must be consolidated if the enterprise has both (a) the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company is evaluating the impact that this change in accounting policy will have on our consolidated financial statements. Based on our initial assessment, we anticipate that certain entities that are consolidated under our current accounting policy may not be consolidated subsequent to the effective date of the new guidance. The Company does not expect this change in accounting policy to have a material impact on our consolidated financial statements.

F-12

Investments

Acquisitions

On January 2, 2008, the Company entered into separate letters of intent to acquire Magic Arts and Entertainment, LLC (Magic) and NewSpace Entertainment, LLC (NewSpace). As part of the letters of intent, the managements of Magic and NewSpace agreed to manage the operations of their respective companies for the benefit of the Company from January 2, 2008 until the transactions could be finalized. The managements of Magic and NewSpace were required to consult and obtain the approval of the management of the Company prior to entering into any long term arrangements or transactions that were outside the normal course of business. Further, the Company assumed all responsibility for any losses or profits that might be incurred or earned during this period by both Magic and NewSpace. As such, the Company has included the results of operation of Magic and NewSpace in its consolidated operations as of January 2, 2008, the date the company acquired effective control. The acquisition of Magic was completed on February 29, 2008 and the acquisition of NewSpace was completed on March 12, 2008.

Magic Arts and Entertainment

Pursuant to the Merger Agreement and Plan of Merger, we paid the two stockholders of Magic, Joseph Marsh and Lee Marshall, a total of $2.1 million in cash and issued to them a total of 476,190 restricted shares of our common stock with a market value of $2.3 million. Messrs Marsh and Marshall were the former owners of Exhibit Merchandising. Mr. Marsh, as a result of the two transactions and open market purchases, owns approximately 15% of the Company and Mr. Marshall owns approximately 6% of the Company. Further, at February 28, 2009, we issued an additional 190,476 shares of our common stock with a fair market value of $256,000 to the former owners of Magic Arts and Entertainment as they achieved the pre-determined EBITDA threshold. We will be required to issue to the former Magic stockholders an additional 190,476 shares of our common stock if certain EBITDA milestones are achieved during the next twelve months. These milestones are based upon the results achieved by Tix Productions, Inc. (“TPI”), a wholly owned subsidiary of the Company that focuses on providing live entertainment.

The assets of Magic consist primarily of agreements, copyrights and licenses to theatres, productions, and touring acts. We carry on Magic’s business through TPI.

The acquisition of Magic has been accounted for as a purchase and the operations of the company have been consolidated since January 2, 2008, the effective date of the acquisition. The $4.4 million purchase price was allocated based upon the fair value of the acquired assets, as determined by management with the assistance of an independent valuation firm. As a result of the additional shares issued with a fair market value of $256,000, the adjusted purchase price of Magic is $4.7 million.

Allocation of the Purchase Price of Magic Arts & Entertainment:

Tangible assets, net of liabilities assumed:	$	143,000
Intangible assets:
Employment Agreement		1,775,000
Technology-based		5,000
Contract		476,000
Goodwill		2,273,000
Purchase price	$	4,672,000

F-13

In conjunction with the completion of the Merger, we entered into written employment agreements with Joseph B. Marsh and Lee D. Marshall, the co-founders of Magic, under which they serve as the Co-Chief Executive Officers of TPI. The term of each of the employment agreements commenced on February 29, 2008 and will expire on February 28, 2011, unless sooner terminated in accordance with the applicable provisions of the employment agreement. Under the employment agreements, Mr. Marsh is entitled to an annual salary of $100,000 and Mr. Marshall is entitled to an annual salary of $300,000 that will increase by $25,000 each year during the term of the agreement. Mr. Marshall also is eligible to receive annual bonuses based upon TPI exceeding performance milestones specified in his employment agreement.

In the event of the termination of employment of Mr. Marsh or Mr. Marshall for any reason other than termination by us for “cause” (as defined in the employment agreement) or termination by reason of his death or permanent disability, we have agreed to continue to pay Mr. Marsh or Mr. Marshall or their personal representatives, as the case may be, the annual salary under his employment agreement for six months following their departure.

Under their employment agreements, each of Messrs. Marsh and Marshall agrees not to compete with us during the period from the date on which their employment with the Company is terminated for any reason through the fifth anniversary of such date. Mr. Marsh was a shareholder of Tix prior to its acquisition of Magic and presently owns approximately 15% of Tix's common stock.

NewSpace Entertainment

Pursuant to the merger agreement, we paid to the three stockholders of NewSpace $1.4 million in cash and issued to them a total of 571,428 restricted shares of our common stock with a market value of $2.6 million.

The assets of NewSpace consist primarily of agreements, copyrights and licenses to theatres, productions, and touring acts. We carry on the business of NewSpace through TPI.

The acquisition of NewSpace has been accounted for as a purchase and the operations of the company have been consolidated since January 2, 2008, the effective date of the acquisition. The $4.0 million purchase price was allocated and based upon the fair value of the acquired assets, as determined by management with the assistance of an independent valuation firm.

Allocation of the Purchase Price of NewSpace Entertainment:

Tangible assets, net of liabilities assumed:	$	293,000
Intangible assets:
Licensing Contracts		64,000
Employment Agreements		1,698,000
Technology-based		5,000
Goodwill		1,953,000
Purchase price	$	4,013,000

In conjunction with the completion of the Merger, we entered into written employment agreements with John Ballard, Steve Boulay and Bruce Granath, the three stockholders of NewSpace, pursuant to which they serve as President, Chief Operating Officer and Vice President - Marketing, respectively, at TPI. The term of each of the employment agreements commenced on March 11, 2008, and will expire on the third anniversary of such date, unless sooner terminated in accordance with applicable provisions of the employment agreements.

Mr. Ballard and Mr. Boulay are entitled under their respective employment agreements to an annual salary of $185,000. Under his employment agreement, Mr. Granath is entitled to an annual salary of $115,000. Each of Messrs. Ballard, Boulay and Granath are entitled to increases in their annual salaries of at least 3% per annum.

If Messrs. Ballard, Boulay or Granath are terminated “for cause” as defined in their employment agreements or the employment agreements expire upon their respective terms, each agrees not to compete with us during the period from the date of termination or expiration through the fifth anniversary of such date.

In the event that employment of any of Messrs. Ballard, Boulay or Granath is terminated by the Company “without cause” (as defined in their respective employment agreements) or is terminated by any of Messrs. Ballard, Boulay and Granath for “good reason” (as defined in their respective employment agreements), we have agreed to continue to pay Messrs. Ballard, Boulay or Granath, or their personal representatives, as the case may be, his annual salary under his employment agreement for six months.

During the year ended December 31, 2007 the Company acquired Exhibit Merchandising, LLC.

F-14

Exhibit Merchandising

On August 8, 2007, Tix Corporation purchased substantially all of the assets of Exhibit Merchandising LLC; an Ohio limited liability company (“EM”). EM was owned by Mr. Marsh and Mr. Marshall, the former owners of Magic. In exchange for the assets of EM, we paid $11,450,000 in cash and issued 5,000,000 shares of the Company’s restricted common stock with a market value of $35.0 million and assumed $120,000 accounts payable and accrued expenses, primarily related to inventory purchases of EM. EM is based in Streesboro, Ohio, and is engaged in the business of product merchandise development and sales related to museum exhibits, including the King Tutankhamen and Pirates of the Caribbean tours. EM sells themed merchandise, memorabilia and collector’s items in specialty stores that operate for the duration of the tours’ presence at a particular museum. EM is the sole operating unit in our Event and Exhibit Merchandising segment.

In connection with the Asset Purchase Agreement, the Company entered into an employment agreement with Mr. Curtis Bechdel (the “Employment Agreement”) pursuant to which he will serve as Vice President, Operations, of EM Nevada for a three year term, subject to extension. In addition, the Company also entered into a two-year Consulting Agreement with Lee Marshall (the “Consulting Agreement”) pursuant to which Mr. Marshall agreed to act as a member of the Company’s transition, assimilation and operating team relating to the assets of EM and the operation of the business relating to the Purchased Assets. For his services, the Company agreed to pay Mr. Marshall 100,000 restricted shares of the Company’s Common Stock.

As a condition to the Closing, the Company entered into a Voting Agreement with Joseph Marsh pursuant to which, for a period of four years, Mr. Marsh granted the Company, through its board of directors, the right to vote all of his shares, including the shares acquired pursuant to the Asset Purchase Agreement. As of the date hereof, such shares totaled 4,401,599.

The acquisition of Exhibit Merchandising has been accounted for as a purchase and the operations of the company have been consolidated commencing with the closing of the transaction. The $46.6 million purchase price was allocated based upon the fair value of the acquired assets, as determined by management with the assistance of an independent valuation firm.

Allocation of the Purchase Price of Exhibit Merchandising:

Tangible assets:	$	4,597,000
Intangible assets:
Licensing Contracts		12,202,000
Employment Agreements		2,538,000
Miscellaneous		118,000
Goodwill		27,115,000
Purchase price	$	46,570,000

For the year ended December 31, 2008, the Company’s management performed its annual impairment testing of goodwill and intangibles based on a combination of factors, including the economic environment, decreased revenues and increased costs, and determined that a noncash goodwill and intangible impairment charge associated with the intangible assets of EM was required. With the assistance of an independent study, the Company’s management performed a study of the goodwill and intangible assets acquired related to EM, and recorded charges to goodwill and intangible assets of $25.4 million and $7.7 million, respectively for the year ended December 31, 2008. There were no impairments of goodwill or intangible assets in 2009 and 2007. Once an impairment of goodwill or other intangible assets has been recorded, it cannot be reversed. There can be no assurance that future goodwill impairments will not occur.

The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2007 presented below gives effect to the acquisitions as if the transaction had occurred at the beginning of such period and includes certain adjustments that are directly attributable to the transaction, which are expected to have a continuing impact on the Company. No pro forma information is necessary for 2009 and 2008 as the companies acquired were included for the entire year.

Pro forma data:

	Pro Forma
	(unaudited)
	Year Ended
	December 31, 2007

Revenues	$	44,384,000

Net loss	$	(16,417,000	)

Pro forma net loss per weighted average share, basic and diluted	$	(0.60	)

F-15

Intangible Assets

The following table summarizes the original cost, the related accumulated amortization, and the net carrying amounts for the Company’s intangible assets at December 31, 2009.

	Estimated											Net
	Useful	Original		Accumulated			Impairment					Carrying
	Lives	Cost		Amortization			Adjustment			Adjustment		Amount
Marketing Based	3-6 years	$	12,277,000	$	(3,456,000	)	$	(6,852,000	)	$	-	$	1,969,000
Contract commitments (1)	3-7 years		6,794,000		(3,298,000	)		(835,000	)		-		2,661,000
Customer relationships	3 years		612,000		(574,000	)		-			-		38,000
Technology Based	3 years		111,000		(100,000	)		-			-		11,000
Intellectual property (e.g. domain names)	5 years		130,000		(24,000	)		-			-		106,000
Goodwill	indefinite		31,084,000		-			(25,445,000	)		256,000		5,895,000
Total		$	51,008,000	$	(7,452,000	)	$	(33,132,000	)	$	256,000	$	10,680,000

Ticketing Services
	Assigned		Accumulated						Carrying
	Value		Amortization			Adjustment			Amount
Marketing Based	$	75,000	$	(70,000	)	$	-		$	5,000
Contract commitments		124,000		(49,000	)		-			75,000
Customer relationships		612,000		(574,000	)		-			38,000
Technology Based		100,000		(93,000	)		-			7,000
Intellectual property (e.g. domain names)		130,000		(24,000	)		-			106,000
Total	$	1,041,000	$	(810,000	)	$	-		$	231,000

Merchandising
	Assigned		Accumulated						Carrying
	Value		Amortization			Adjustment			Amount
Marketing Based	$	12,202,000	$	(3,386,000	)	$	(6,852,000	)	$	1,964,000
Contract commitments		2,657,000		(1,606,000	)		(835,000	)		216,000
Goodwill		27,115,000		-			(25,445,000	)		1,670,000
Total	$	41,974,000	$	(4,992,000	)	$	(33,132,000	)	$	3,850,000

Live Entertainment
	Assigned		Accumulated						Carrying
	Value		Amortization			Adjustment			Amount
Contract commitments (1)	$	4,013,000	$	(1,643,000	)	$	-		$	2,370,000
Technology Based		11,000		(7,000	)		-			4,000
Goodwill		3,969,000		-			256,000			4,225,000
Total	$	7,993,000	$	(1,650,000	)	$	256,000		$	6,599,000

(1) Balance includes $400,000 of assigned contract value and $114,000 accumulated amortization related to the rights to develop, produce, and promote “101 Dalmatians the Musical” for a seven year period. The net value of these rights is included in the balance sheet in the amount classified as “Investments in and advances to nonconsolidated affiliates”.

During 2009, the Company recorded an adjustment to goodwill as a result of the issuance of 190,000 shares of common stock with a fair market value on the date of issuance of $256,000 to the former shareholders of Magic pursuant to an earn-out provision of the Magic Arts and Entertainment merger agreement.

F-16

During 2008, Tix’s management recorded impairment charges to goodwill and intangible assets related to the acquisition of Exhibit Merchandising of $25.4 million and $7.7 million, respectively. At December 31, 2008, Management did its review and believed that impairment may have occurred in the Company’s Exhibit Merchandising segment due to economic events and financial performance in 2008. In the first nine months of 2008, the King Tutankhamun exhibit, which is the Company’s Exhibit Merchandising Segment’s primary source of revenue, was in Europe where it performed below Management’s expectations due to less than expected attendance, higher cost of doing business in Europe than in the United States, and a difference in buying patterns of consumers in Europe as compared to the United States. It was believed that revenues would improve when the Exhibit returned to the United States in November 2008, however, revenues in the fourth quarter of 2008 continued to be lower than projected as consumers were forced to reduce their non-essential spending due to deteriorating economic conditions. As a result, Management recorded the impairment charge. On the contrary, Management did its review and did not believe that an economic impairment had occurred in the Company’s Ticketing Services segment or Live Entertainment Segment. Ticketing Services revenues are primarily derived from the sale of Las Vegas discount show tickets and there was no economic slowdown in our Ticketing Services segment. Live Entertainment revenues were minimally impacted by the economic slowdown as a portion of Live Entertainment’s revenues is derived from subscriptions which are subscribed to a year in advance and the other portion is derived from brand name entertainment which was minimally impacted by the economic slowdown.

Total amortization expense related to intangible assets in 2009, 2008, and 2007 was $1,966,000, $4,110,000, and $1,375,000, respectively. Total estimated amortization expense with respect to intangible assets for 2010 though 2014 is as follows:

Years Ending December 31,
2010	$	(1,596,000	)
2011		(1,326,000	)
2012		(1,326,000	)
2013		(403,000	)
2014		(59,000	)
Beyond 2014		(75,000	)
Total	$	(4,785,000	)

Obligations Under Capital Leases

The Company has entered into various capital leases for equipment with monthly payments ranging from $26 to $1,767 per month, including interest, at interest rates ranging from 9.8% to 19.7% per annum. At December 31, 2009, monthly payments under these leases aggregated $4,900. The leases expire at various dates through 2013.

At December 31, 2009, 2008 and 2007, property and equipment included assets under capital leases of $408,000, $408,000 and $386,000, less accumulated amortization of $312,000, $279,000 and $237,000, respectively.

Minimum future payments under capital lease obligations are as follows:

Years Ending December 31,
2010	$	67,000
2011		9,000
2012		8,000
2013		3,000
2014		-
Total payments		87,000
Less: amount representing interest		(10,000	)
Present value of minimum lease payments		77,000
Less: current portion		(60,000	)
Non-current portion	$	17,000

Related Party Transactions

Note Payable, Stockholder:

On April 24, 2007, the Company borrowed $2,000,000 from Joseph Marsh, a greater than 10% stockholder of the Company, pursuant to an unsecured short-term note, with interest at 8%, per annum payable monthly. The note was due on or before April 1, 2008. During the term of the loan, Mr. Marsh had the right to convert the loan into an investment in any subsequent private placement that the Company may conduct. On September 29, 2007 the Company repaid the loan in full. During the term of the loan the Company paid $76,000 in interest. On March 1, 2008, as a result of Tix acquisition of Magic Arts & Entertainment, Mr. Marsh became an employee of Tix.

F-17

Member of the Board of Directors:

During 2009, 2008, and 2007, Benjamin Frankel, a director of the Company, was a principal in Frankel, LoPresti & Co., an accountancy corporation. For the years ended December 31, 2009, 2008, 2007, we paid Mr. Frankel or his firm for accounting and tax services $55,000, $33,000, and $53,000.

Income Taxes

At December 31, 2009, the Company had Federal net operating loss carryforwards of approximately $17.8 million expiring in 2010 in varying amounts through 2027. The Company also had California state net operating loss carryforwards of approximately $1.5 million of California state net operating loss carryforwards expiring in 2013 in varying amounts through 2016.

Income tax expense (benefit for the year ended December 31, 2009 is shown as follows:

Years ended December 31,	2009			2008		2007

Current	$	167,762		$	-	$	-
Deferred		(131,261	)		-		-
Total	$	36,501		$	-	$	-

The effects of temporary differences between the financial reporting and income tax bases of assets and liabilities which give rise to the deferred tax assets and liabilities at December 31, 2009 are presented below:

Years ended December 31,	2009			2008			2007

Inventory of deferred items:
Net operating loss	$	6,060,000		$	9,481,000		$	9,190,000
Accrued compensation		48,000			-			-
Bad debt reserve		1,000			1,000			-
Deferred revenue		58,000			51,000			-
Inventory reserve		31,000			14,000			-
Deferred rent		15,000			30,000			66,000
Depreciation		32,000			-			-
Amortization		8,957,000			1,974,000			9,174,000
UNICAP		512,000			-			-
Stock options		1,248,000			-			-
Accrued loss on "101 Dalmatians"		489,000			-			-
Other		(7,000	)		-			27,000
Total deferred tax assets	$	17,444,000		$	11,551,000		$	18,457,000

Valuation allowance		(17,444,000	)		(11,551,000	)		(18,457,000	)

Net deferred tax assets	$	-		$	-		$	-

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will not realize the benefits of these deductible differences. Therefore, a full valuation allowance has been provided.

F-18

Stockholders’ equity

The Company from time to time issues its common stock, options and warrants as non-cash compensation for services rendered, often in conjunction with an agreement that requires the service provider to assist the Company for a period of two to four years in obtaining strategic alliances and discount and premium ticket opportunities. Issued stock is valued at the closing stock price and the entire value of the contract is expensed on the date of grant since success is not assured in these types of arrangements and there are no performance requirements. The expense is recorded in marketing and general administrative expenses commensurate with the services provided. During the year ended December 31, 2009, the Company issued 50,000 shares of common stock to consultants with a fair market value of $119,000 on the date of issuance and 38,000 shares of common stock to officers and employees with a fair market value of $8,000 on the date of issuance. Additionally, the Company issued 107,000 shares of common stock, net of 43,000 shares withheld related to income taxes as a result of an employee option exercise. The Company also issued 190,000 shares of common stock during the year ended December 31, 2009 with a fair market value on the date of issuance of $256,000 pursuant to an earn-out provision of the Magic Arts and Entertainment merger agreement.

In the third quarter of 2008, the Company’s board of directors authorized a share repurchase program. As of December 31, 2009, the Company has repurchased 1,000,000 shares for $2,532,000. The shares were repurchased at prices that range from $1.20 per share to $4.13 per share.

In the second quarter of 2009, the Company’s board of directors authorized an additional share repurchase program (“the 2009 Repurchase Program”) as the 1,000,000 shares authorized to be repurchased under the program authorized in the third quarter of 2008 had been purchased. In December 2009, the Company’s board of directors amended the 2009 Repurchase Program to increase the authorized number of shares repurchased from 1,000,000 to 5,000,000 shares, and to extend the repurchase period from one year to three years. Under the 2009 Repurchase Program, the Company had repurchased 1,340,000 shares for $2,078,000, as of December 31, 2009. The shares were repurchased at prices that range from $1.50 per share to $3.13 per share.

Service Providers and Vendors

During the years ended December 31, 2009, 2008, and 2007, the Company incurred $119,000, $424,000, and $6.1 million of consulting expense as a result of the issuance of 50,000, 86,000, and 1.1 million shares of its common stock, respectively. The fair market value of the shares issued during the year ended December 31, 2009 was between $1.17 and $3.40 at the time the stock was issued. The fair market value of the shares issued during the year ended December 31, 2008 was between $4.58 and $5.20 per share at the time the stock was issued. The fair market value of the shares issued during the year ended December 31, 2007 was between $3.75 and $7.20.

On May 31, 2007, in conjunction with a three year consulting agreement to assist us with developing strategic relationships with sporting event promoters and presenters, we issued to Centaurus One, LLC (Centaurus) 250,000 shares of our common stock which had a fair market value at the time of issuance of $1.4 million and we issued a three year warrant to purchase 1,000,000 shares of our common stock for $5.35 which had a fair market value of $3.4 million as calculated using the Black Scholes option pricing model. On November 27, 2007, we entered into a mutual termination agreement with Centaurus whereby the services provided to Tix by Centaurus have earned all the granted stock, but only half of the warrants to purchase 1,000,000 shares of our common stock, therefore the number of shares the warrant can purchase were reduced to 500,000 shares. As the agreement did not have any performance requirements included in it, the fair market value of the warrants and shares were expensed at the time of issuance.

On July 20, 2007, in conjunction with a four year consulting agreement to assist us in establishing strategic relationships with producers, promoters and venues, we issued a private consultant 250,000 share of our common stock with a fair market value of $1.4 million. As the agreement did not have any performance requirements included in it, the fair market value of the shares was expensed at the time of issuance.

Related Parties and Employees

During the year ended December 31, 2007, the Company issued a total of 100,000 shares of common stock to a non-officer employee for services rendered. The shares of common stock were recorded at their fair market value on the date of issuance of $635,000 and were charged to operations as general and administrative expense during the year ended December 31, 2007.

During March 2006, the Company issued 500,000 shares of common stock pursuant to a three-year employment agreement with its President and Chief Executive Officer. The 500,000 shares of common stock had a fair market value on the date of issuance of $110,000 ($0.22 per share) and were charged to operations as general and administrative expense over the three-year period commencing March 1, 2006. During the years ended December 31, 2009, 2008, and 2007, 28,000, 167,000, and 167,000 shares of common stock had vested, and were recorded at their approximate fair market values of $6,000, $37,000, and $37,000, respectively, which were charged to operations as general and administrative expenses.

On March 13, 2006, the Company issued 150,000 shares of common stock to Kimberly Simon, its Chief Operating Officer. The shares of common stock are subject to pro rata forfeiture over a three-year period if Ms. Simon ceases to be employed by the Company. The 150,000 shares of common stock had a fair market value on the date of issuance of $33,000 ($0.22 per share) and were charged to operations as general and administrative expense over the three-year period commencing March 13, 2006. During the years ended December 31, 2009, 2008, and 2007, 10,000, 50,000, and 50,000 shares of common stock had vested and were recorded at their approximate fair market values of $3,000, $11,000, and $11,000, respectively, which were charged to operations as general and administrative expenses.

F-19

Private Placement

On September 24, 2007, the Company completed the closing of a private investment in public equity financing. At the closing, the Company sold to institutional and accredited investors 3,744,000 shares of its common stock for a price of $4.75 per share, or an aggregate of approximately $17.8 million. In addition, the Company also issued to the investors two-year warrants to purchase 1,870,000 shares of its common stock at an exercise price of $5.50 per share. In conjunction with this offering, the Company paid fees of $75,000 and issued a total of 147,000 shares of its common stock to finders in connection with the financing. The offer and sale of the shares sold were not registered under the Securities Act of 1933 in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act and Regulation D promulgated thereunder. The shares sold in this offering may not be reoffered or sold in the United States by the holders in the absence of an effective registration statement, or exemption from the registration requirements, under the Securities Act.

10.

Stock-Based Compensation Plans

The Company has various stock-based compensation plans, which are described below.

Consultant Stock Plan

On December 11, 2003, the Company adopted the 2003 Consultant Stock Plan (the “Consultant Stock Plan”). The purpose of the Consultant Stock Plan is to advance the interests of the Company by helping the Company obtain and retain the services of persons providing consulting services upon whose judgment, initiative, efforts and/or services the Company is substantially dependent, by offering to or providing those persons with incentives or inducements affording such persons an opportunity to become owners of capital stock of the Company. Consultants or advisors are eligible to receive grants under the stock plan program only if they are natural persons providing bona fide consulting services to the Company or its subsidiaries, with the exception of any services they may render in connection with the offer and sale of the Company’s securities in a capital-raising transaction, or which may directly or indirectly promote or maintain a market for the Company’s securities.

The Consultant Stock Plan provides for the granting of either common share purchase options or stock bonuses as compensation. A total of 1,600,000 common shares were reserved for issuance under the Consultant Stock Plan. If any awards granted under the plan are forfeited for any reason before they have been exercised, vested or issued in full, the unused shares subject to those expired, terminated or forfeited awards will again be available for purposes of the plan. No awards may be issued after December 11, 2013.

On March 3, 2004, the Company filed with the Securities and Exchange Commission a registration statement on Form S-8 for the purpose of registering 1,600,000 common shares issuable under the Consultant Stock Plan under the Securities Act of 1933. As of December 31, 2009, 715,000 shares of common stock were reserved for issuance under the Consultant Stock Plan.

2009 Equity Incentive Plan

On July 8, 2009, the 2009 Equity Incentive Plan (the “2009 Equity Plan”) for officers, employees and consultants of the Company was approved pursuant to a Joint Written Consent of the Board of Directors and Majority Stockholders of the Company. The 2009 Equity Plan authorized the granting of not more than 3,000,000 restricted shares, stock appreciation rights (“SAR’s”), and incentive and non-qualified stock options to purchase shares of the Company’s common stock. The 2009 Equity Plan provided that stock options or SAR’s granted can be exercisable immediately as of the effective date of the applicable agreement, or in accordance with a schedule or performance criteria as may be set in the applicable agreement. The exercise price for non-qualified stock options or SAR’s would be the amount specified in the agreement, but shall not be less than the fair value of the Company’s common stock at the date of the grant. The exercise price for incentive stock options cannot be less than the fair market value of the Company’s common stock on the date of grant (110% of the fair market value of the Company’s common stock on the date of grant for a stockholder owning in excess of 10% of the Company’s common stock).

During the year ended December 31, 2009, the Company issued options to purchase 25,000 shares of common stock under the 2009 Equity Plan. Further, options previously granted to purchase 340,000 shares of common stock that were not under a Company Plan were transitioned and deemed to be grants under the newly adopted 2009 Equity Plan. As of December 31, 2009, options to purchase 2,635,000 shares of common stock remain reserved for issuance under the 2009 Equity Plan.

2004 Option Plan

F-20

During the year ended December 31, 2009, the Company issued 150,000 options to purchase shares of its common stock under the 2004 Option Plan. As of December 31, 2009, options to purchase 144,000 shares of common stock were reserved for issuance under the 2004 Option Plan.

2004 Directors Option Plan

On March 3, 2005, the Company adopted the Directors Stock Option Plan (the “2004 Directors Option Plan”) for non-employee directors of the Company. The 2004 Directors Option Plan was approved pursuant to a Joint Written Consent of the Board of Directors and Majority Stockholders of the Company dated September 22, 2004. The 2004 Directors Option Plan authorized the granting of non-qualified stock options to purchase an aggregate of not more than 100,000 shares of the Company’s common stock. The 2004 Directors Option Plan provided that options granted would be exercisable for a period not to exceed ten years and would vest on a cumulative basis as to one-third of the total number of shares covered thereby at any time after one year from the date the option was granted and an additional one-third of such total number of shares at any time after the end of each consecutive one-year period thereafter until the option had become exercisable as to all of such total number of shares. The exercise price for non-qualified stock options would be the fair value of the Company’s common stock at the date of the grant. No option may be exercised during the first six months of its term except in the case of death. On May 30, 2007, an amendment to the 2004 Directors Option Plan was approved through a Corporate Resolution by the Company’s Board of Directors, and adjusts the vesting period of options granted from vesting one-third annually over three years to vesting immediately. On July 8, 2009, an additional amendment to the 2004 Directors Option Plan (“The Amendment”) was approved pursuant to a Joint Written Consent of the Board of Directors and Majority Stockholders of the Company. The Amendment increased the authorized amount of option grants to purchase shares of our common stock to 1,000,000.

During the year ended December 31, 2009, the Company issued 100,000 options to purchase shares of its common stock under the 2004 Directors Option Plan. As of December 31, 2009, options to purchase 830,000 shares of common stock remain reserved for issuance under the 2004 Directors Option Plan.

The fair value of each option on the date of grant was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

	2009			2008			2007
Risk free rate of return		1.36% - 3.34	%		2.12% - 2.82	%		4	%
Option lives in years		3 - 6.5			3			6
Annual volatility of stock price		100.6% - 432.8	%		81.5% - 82.3	%		112.5	%
Dividend yield		0	%		0	%		0	%

Summary of Stock Options

A summary of the combined stock options for the year ended December 31, 2009 for the four plans discussed above is as follows:

				Weighted
	Number			average
	of			exercise
	options			price

Balance outstanding, January 1, 2007		451,500		$	2.05

Options granted		847,000			6.94
Options exercised		(1,000	)		0.39
Options expired or forfeited		(9,000	)		6.85

Balance outstanding, December 31, 2007		1,288,500			5.24

Options granted		75,000			3.70
Options exercised		(100,500	)		2.01
Options expired or forfeited		-			-

Balance outstanding, December 31, 2008		1,263,000			5.41

Options granted		275,000			1.30
Options exercised		(150,000	)		0.15
Options expired or forfeited		(137,000	)		4.38

Balance outstanding, December 31, 2009		1,251,000		$	5.24

Balance exercisable, December 31, 2009		829,000		$	5.54

F-21

Information relating to outstanding stock options at December 31, 2009, summarized by exercise price, is as follows:

	Outstanding						Exercisable
					Weighted				Weighted
			Life		Average				Average
Exercise Price Per Share	Shares		(Years)		Exercise Price		Shares		Exercise Price

$6.00 - $7.20		806,000		6.80	$	7.01		559,000	$	7.02
$4.00 - $5.99		20,000		2.21	$	4.30		20,000	$	4.30
$2.00 - $3.99		150,000		3.28	$	3.07		150,000	$	3.07
$0.22 - $1.99		275,000		7.50	$	1.30		100,000	$	1.25

		1,251,000		6.46	$	5.24		829,000	$	5.54

The Company recorded compensation expense pursuant to authoritative guidance provided by the Financial Accounting Standards Board for the years ended December 31, 2009 and 2008 of $1.4 million and $1.7 million, respectively. As of December 31, 2009, the Company has outstanding unvested options with future compensation costs of $1.1 million, which will be recorded as compensation cost as the options vest over their remaining average life of 6.46 years.

The intrinsic value of outstanding stock options at December 31, 2009 was $120,000, as compared to $290,000 at December 31, 2008. The intrinsic value of exercisable stock options at December 31, 2009 was $49,000, as compared to $290,000 at December 31, 2008.

In conjunction with an investor relations consulting agreement in 2009, the Company issued 150,000 warrants, of which 75,000 vested immediately. The remaining 75,000 vested over six months, which was the term of the consulting agreement. As the consulting agreement could be terminated at any time and the consulting arrangement did not contain any performance measurements or sufficiently large disincentives for non-performance, the related consulting expense of these 75,000 warrants was recognized over the term of the contract. In the year ended December 31, 2009, we recorded an expense of $207,000 related to warrants issued in conjunction with this consulting agreement. During the year-ended December 31, 2008, in conjunction with a consulting agreement, the Company issued 150,000 warrants, of which 50,000 vested immediately. The remaining 100,000 warrants vested over six months, which was the term of the consulting agreement. As the consulting agreement may be terminated at any time and the consulting arrangement did not contain any performance measurements or sufficiently large disincentives for non-performance, the related consulting expense on these 100,000 warrants was recognized over the term of the contract. In the year ended December 31, 2009, the remaining 33,000 warrants vested, and we recorded an expense of $18,000 related to the 2008 contract.

F-22

A summary of warrant activity for the year ended December 31, 2009 is as follows:

				Weighted
	Number			average
	of			exercise
	warrants			price

Balance outstanding, January 1, 2007		2,829,796		$	0.52

Warrants granted		2,372,007			5.47
Warrants exercised		(1,229,796	)		0.48
Warrants expired		-			-

Balance outstanding, December 31, 2007		3,972,007			3.47

Warrants granted		150,000			4.00
Warrants exercised		(1,400,000	)		0.50
Warrants expired		(50,000	)		0.50

Balance outstanding, December 31, 2008		2,672,007			5.11

Warrants granted		150,000			1.14
Warrants exercised		-			-
Warrants expired		(1,872,007	)		5.50

Balance outstanding, December 31, 2009		950,000		$	3.70

Balance exercisable, December 31, 2009		950,000		$	3.70

The intrinsic value of outstanding warrants at December 31, 2009 was $278,000, as compared to $249,000 at December 31, 2008. Information relating to outstanding warrants at December 31, 2009, summarized by exercise price, is as follows:

	Outstanding						Exercisable
					Weighted				Weighted
			Life		Average				Average
Exercise Price Per Share	Shares		(Years)		Exercise Price		Shares		Exercise Price

$2.00 - $5.50		650,000		0.64	$	5.04		650,000	$	5.04
$0.36 - $1.99		300,000		2.12	$	0.82		300,000	$	0.82

		950,000		1.11	$	3.70		950,000	$	3.70

11.

Commitments

Lease Commitments:

The Company leases office space for its corporate headquarters in Studio City, California. Additionally, the Company’s wholly-owned subsidiary, Tix4Tonight, LLC, leases space for its thirteen ticket facilities and its administrative offices in Las Vegas, Nevada, for various periods ranging from one year to five years.

Many of the Company’s operating leases contain predetermined fixed increases in the minimum rental rate during the initial lease term and/or rent holiday periods. For these leases, the Company recognizes the related rent expense on a straight-line basis beginning on the effective date of the lease. The Company records the difference between the amounts charged to expense and the rent paid as deferred rent on the Company’s balance sheet.

Years Ending December 31,
2010	$	3,506,000
2011		3,030,000
2012		2,582,000
2013		1,512,000
2014 and beyond		1,570,000
Total payments	$	12,200,000

F-23

Included in the minimum future rental payments above are the leases associated with the acquisition of All Access in March 2010. Please refer to Note 15 of the footnotes to the consolidated financial statements.

Retirement Plan:

The Company has a 401(k) retirement plan which covers substantially all employees. Under the plan, participants may defer the receipt of up to 12% percent of their annual compensation, but not to exceed the maximum amount as determined by the Internal Revenue Code. The amount of the employer matching contribution is equal to the sum of 25% of each dollar deferred, limited to 1% of the participant’s compensation. The Company may make additional matching contributions as determined and approved by the Board of Directors. Total 401(k) retirement plan expense amounted to $141,000, $119,000, and $8,000 for the years ended December 31, 2009, 2008, and 2007, respectively.

12.

Legal Proceedings

Vegas.Com Trademark Litigation

Vegas.Com Antitrust Litigation

13.

Segment Reporting

We operate in three reportable segments: ticketing services, event and branded merchandising, and Tix Productions, Inc. (TPI).

Our ticketing services are carried out by our wholly owned subsidiary Tix4Tonight, which offers for sale discount and premium tickets, and provides membership group sales services. Discounted tickets are sold byTix4Tonight, while premium tickets are offered through Tix4AnyEvent. When selling last minute discounted tickets, Tix4Tonight sells them under short-term, exclusive and non-exclusive agreements with approximately 85 Las Vegas shows and attractions, out of a total of approximately 110 Las Vegas shows and attractions running at any one time. Tix4Tonight typically does not know exactly what shows it will be able to offer tickets for until the same day of the show. There are usually many more tickets available each day than are sold, although it is not uncommon for Tix4Tonight to sell out its supply of tickets for individual shows. The shows are paid on a weekly basis only for the tickets that Tix4Tonight actually sells to customers. Tix4Tonight has no financial risk with respect to unsold tickets and revenues are recorded at net of cost. In February 2009, we launched our internet based ticketing operation, Tix4Members.com in conjunction with Costco Wholesale Corporation (Costco). However, revenues from the Costco arrangement had been minimal. As a result, we terminated the Costco arrangement effective October 2009. The Company believes in this strategy of selling discount tickets to concerts, live theater and sporting events to membership group members through co-branded websites and continues to seek additional partners. As with our Tix4Tonight operation in Las Vegas, Tix4Members.com offers a marketing channel for producers, presenters, artists, arenas and theaters nationwide to take advantage of our strong position in the discounted ticket sales and live entertainment industry. Tix4Members.com operates in a manner similar to Tix4Tonight with a few key differences. Instead of relying on physical ticket booth facilities for direct sales, Tix4Members uses the internet as its customer interface, and instead of offering only discounted day of show tickets, it has expanded the date range of its ticket availability of discount tickets to concerts, theatre shows and sporting events.

F-24

The Company provides exhibit and event merchandising through its wholly owned subsidiary Exhibit Merchandising LLC (EM), which was acquired August 8, 2007. EM provides retail specialty stores with branded merchandise for touring museum exhibitions and touring theatrical productions. EM owns and operates complete turnkey retail stores with commercially-available and extensive custom-branded products for sale in addition to professional management that complements the exhibition or theatrical production it represents. It operates the stores in spaces rented in conjunction with the exhibit. To date, revenues from the management of retail outlets associated with the sale of merchandise related to touring exhibits have been primarily derived from “Tutankhamun and The Golden Age of the Pharaohs.”

In December 2007, the Company announced that it had entered into letters of intent to acquire two live theatrical and concert production companies: Magic Arts & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace). As part of the letters of intent, the managements of Magic and NewSpace would manage the operations of their respective companies for the benefit of Tix Corporation from January 2, 2008 until the transactions could be finalized. The managements of Magic and NewSpace were required to consult and obtain the approval of the management of Tix Corporation prior to entering into any long term arrangements or transactions that were outside the normal course of business. Further, Tix Corporation assumed all responsibility for any losses or profits that might be incurred or earned during this period by both Magic and NewSpace. The acquisition of Magic was completed on February 29, 2008 and the acquisition of NewSpace was completed on March 12, 2008. Both Magic and NewSpace were independent presenters and producers of live theater and concerts with a history of working together. The Company combined the operations of the two entertainment companies into its newly-formed wholly-owned subsidiary, Tix Productions Inc. We believe that by combining the operations of the two companies into a single entity, we will be able to better leverage resources, gain operating efficiencies, and more fully utilize the combined network of producers and promoters. NewSpace and Magic will continue to operate under their current names as a reflection of the equity and marketplace recognition of these entities.

Revenue and expenses earned and charged between segments are eliminated in consolidation. Corporate expenses, interest income, interest expense and income taxes are managed on a total company basis.

Information related to these operating segments is as follows:

	Ticketing			Exhibit			Live					Consolidated
	Services			Merchandising			Entertainment		Corporate			and Combined

2009
Revenue	$	18,257,000		$	9,079,000		$	54,455,000	$	-		$	81,791,000
Direct cost of revenues		6,964,000			5,462,000			48,475,000		-			60,901,000
Selling, general and administrative expenses		3,548,000			2,422,000			4,948,000		5,633,000			16,551,000
Depreciation and amortization		515,000			1,179,000			790,000		12,000			2,496,000
Operating income (loss)	$	7,230,000		$	16,000		$	242,000	$	(5,645,000	)	$	1,843,000

Current assets	$	3,073,000		$	3,127,000		$	5,349,000	$	4,733,000		$	16,282,000
Fixed assets		670,000			478,000			82,000		78,000			1,308,000
Intangible assets and goodwill		232,000			3,851,000			6,311,000		-			10,394,000
Other non-current assets		180,000			21,000			1,371,000		6,000			1,578,000
Total assets	$	4,155,000		$	7,477,000		$	13,113,000	$	4,817,000		$	29,562,000

2008
Revenue	$	13,952,000		$	11,030,000		$	44,563,000	$	-		$	69,545,000
Direct cost of revenues		5,725,000			6,877,000			36,150,000		-			48,752,000
Selling, general and administrative expenses		2,720,000			3,681,000			5,884,000		5,654,000			17,939,000
Impairment of goodwill		-			25,445,000			-		-			25,445,000
Impairment of intangible assets		-			7,687,000			-		-			7,687,000
Depreciation and amortization		501,000			3,173,000			916,000		11,000			4,601,000
Operating income (loss)	$	5,006,000		$	(35,833,000	)	$	1,613,000	$	(5,665,000	)	$	(34,879,000	)

Current assets	$	2,960,000		$	4,969,000		$	2,784,000	$	3,770,000		$	14,483,000
Fixed assets		583,000			711,000			109,000		30,000			1,433,000
Intangible assets and goodwill		523,000			4,769,000			6,755,000		-			12,047,000
Other non-current assets		65,000			13,000			801,000		6,000			885,000
Total assets	$	4,131,000		$	10,462,000		$	10,449,000	$	3,806,000		$	28,848,000

2007
Revenue	$	14,284,000		$	4,283,000		$	-	$	-		$	18,567,000
Direct operating expenses		8,829,000			2,843,000			-		-			11,672,000
Selling, general and administrative expenses		15,029,000			905,000			-		5,658,000			21,592,000
Depreciation and amortization		415,000			1,229,000			-		24,000			1,668,000
Operating income (loss)	$	(9,989,000	)	$	(694,000	)	$	-	$	(5,682,000	)	$	(16,365,000	)

Current assets	$	2,133,000		$	5,623,000		$	-	$	4,251,000		$	12,007,000
Fixed assets		668,000			759,000			-		21,000			1,448,000
Intangible assets and goodwill		819,000			40,820,000			-		-			41,639,000
Other non-current assets		46,000			22,000			-		6,000			74,000
Total assets	$	3,666,000		$	47,224,000		$	-	$	4,278,000		$	55,168,000

Balances have been changed for consistency and comparability of assets and expenses.

F-25

Information related to these operating segments is as follows.

14.

Quarterly Financial Information (Unaudited)

Summarized unaudited quarterly financial information for the year-ended December 31, 2009 and fiscal year 2008 are noted below:

	Year Ended December 31, 2009
	First		Second			Third			Fourth
	Quarter		Quarter			Quarter			Quarter

Revenues	$	20,170,000	$	26,584,000		$	9,362,000		$	25,675,000
Depreciation and amortization		621,000		626,000			625,000			624,000
Income (loss) from operations		261,000		630,000			(231,000	)		1,183,000
Equity in losses of nonconsolidated affiliates		-		-			-			(2,644,000	)(2)
Net income (loss)	$	295,000	$	659,000		$	(161,000	)	$	(1,311,000	)(2)
Basic earnings per share	$	0.01	$	0.02		$	0.00		$	(0.04	)
Diluted earnings per share	$	0.01	$	0.02		$	0.00		$	(0.04	)
Shares used in computation of earnings per share:
Basic		32,304,286		32,361,325			32,439,015			32,080,099
Diluted		32,429,891		32,645,364			32,439,015			32,080,099

	Year Ended December 31, 2008
	First		Second			Third			Fourth
	Quarter		Quarter			Quarter			Quarter (1)

Revenues	$	23,163,000	$	16,864,000		$	8,839,000		$	20,679,000
Impairment charge of goodwill and intangible assets		-		-			-			33,132,000
Depreciation and amortization		1,122,000		1,102,000			1,151,000			1,226,000
Income (loss) from operations		472,000		(1,419,000	)		(1,065,000	)		(32,867,000	)(1)
Net income (loss)	$	462,000	$	(1,166,000	)	$	(986,000	)	$	(32,974,000	)(1)
Basic earnings per share	$	0.02	$	(0.04	)	$	(0.03	)	$	(1.02	)
Diluted earnings per share	$	0.01	$	(0.04	)	$	(0.03	)	$	(1.02	)
Shares used in computation of earnings per share:
Basic		30,642,823		31,805,228			32,912,630			32,386,209
Diluted		32,493,343		31,805,228			32,912,630			32,386,209

F-26

The Company performed its 2008 annual impairment testing of goodwill and intangibles as of December 31, 2008. Based on a combination of factors, including the current economic environment, decreased revenues and increased decline in margins management determined an impairment of goodwill and intangible assets had occurred, thus recorded impairment charges to goodwill and intangible assets of $25.4 million and $7.7 million, respectively. There were no impairments of goodwill or intangible assets in 2009.

15.

Subsequent Event

In March 2010, Tix4Tonight acquired certain assets and assumed the responsibility of certain leases of All Access Entertainment, LLC (All Access). All Access was a competitor of Tix4Tonight in the Las Vegas last minute discount ticket market and operated five locations with the main location located in Circus-Circus. The acquisition of these assets and the assumption of the leases provide us with greater coverage of the Las Vegas area in which to sell our discount tickets. Related to the acquisition of certain assets, Tix4Tonightassumed the responsibility of certain leases of All Access Entertainment, LLC for $2.5 million, of which $1.0 million is a secured convertible note. At the option of the holder, the Note is convertible into shares of the Company’s Common Stock at a conversion price per share equal to the daily average closing sale price of the Company’s Common Stock for the thirty day period prior to the date of conversion, but in no event less than $3.00. The Note was not, and any shares of Common Stock issuable upon conversion of the Note will not be, registered under the Securities Act of 1933 as amended.

F-27

TIX CORPORATION

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

Deferred Tax Asset Valuation Allowance

			Charges
	Balance		to costs,							Balance
	at beginning		expenses							at end
Description	of period		and other		Deletions		Other			of period
Year ended December 31, 2007	$	3,500,000	$	-	$	-	$	14,957,000		$	18,457,000
Year ended December 31, 2008	$	18,457,000	$	-	$	-	$	(6,906,000	)	$	11,551,000
Year ended December 31, 2009	$	11,551,000	$	-	$	-	$	5,893,000		$	17,444,000

F-28

TIX CORPORATION

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

Inventory Valuation Allowance

			Charges
	Balance		to costs,						Balance
	at beginning		expenses				Other		at end
Description	of period		and other		Deletions		(1)		of period
Year ended December 31, 2007	$	-	$	45,000	$	-	$	311,000	$	356,000
Year ended December 31, 2008	$	356,000	$	44,000	$	-	$	-	$	400,000
Year ended December 31, 2009	$	400,000	$	45,000	$	-	$	-	$	445,000

(1) Resulted from the acquisition of Exhibit Merchandising in August of 2007.

F-29

INDEX TO EXHIBITS

Exhibit
Number		Description of Document

3.1		Certificate of Incorporation, as filed with the State of Delaware on April 6, 1993 (1)

3.2		Certificate of Amendment to Certificate of Incorporation of Cinema Ride, Inc., as filed with the State of Delaware on August 31, 1993 (1)

3.3		Certificate of Amendment to Certificate of Incorporation of Cinema Ride, Inc., as filed with the State of Delaware on September 16, 1996 (1)

3.4		Fourth Amendment to Certificate of Incorporation of Cinema Ride, Inc., as filed with the State of Delaware, effective March 3, 2005 (6)

3.5		Bylaws of the Company (1)

4		Voting agreement between Mitch Francis and Iqbal Ashraf dated as of July 12, 2006 (4)

10.5		Warrant Holder Rights Agreement between the Company and Finova Capital Corporation (2)

10.8		2003 Consultant Stock Plan (3) (C)

10.9		2004 Stock Option Plan (5) (C)

10.10		2004 Directors Stock Option Plan as amended (7) (C)

10.12		2009 Equity Incentive Plan (7) (C)

10.25		Third Amendment to Lease between the Company and 12001 Ventura Corporation (9)

10.26		Employment Agreement between Tix Corporation and Mitch Francis effective April 2, 2009 (11) (C)

10.27		Asset Purchase Agreement between Tix Corporation and John’s Tickets, LLC, dba AnyEvent Tickets, effective March 14, 2007 (13)

10.28		Employment Agreement between Tix Corporation and John Pirample effective March 14, 2007 (13) (C)

10.29		Asset Purchase Agreement dated as of August 6, 2007 among the Company, EM and the Members (14)

10.30		Employment Agreement dated as of August 8, 2007 with Curt A. Bechdel (14)

10.31		Voting Agreement dated as of August 8, 2007 between the Company and Joseph B. Marsh (14)

10.32		Consulting Agreement dated as of August 8, 2007 between Lee D. Marshall and the Company (14)

10.33		Non-Competition and Confidentiality Agreement dated as of August 8, 2007 among EM, Joseph Marsh, Lee Marshall, John T. Norman and the Company (14)

10.34		Mutual Termination Agreement dated November 5, 2007 between Tix Corporation and Centaurus One, LLC (15)

10.35		Agreement and Plan of Merger By and Among Tix Corporation, a Delaware Corporation, on the one hand, and Magic Arts & Entertainment - Florida, Inc., a Florida Corporation, Joseph B. Marsh, and Lee D. Marshall on the other hand, dated as of February 29, 2008 (16)

10.36		Employment Agreement dated as of February 29, 2008 with Joseph B. Marsh (16)

10.37		Employment Agreement dated as of February 29, 2008 with Lee Marshall (16)

10.38		Agreement and Plan of Merger by and among Tix Corporation and Newspace Acquisition, Inc., on the one hand, and Newspace Entertainment Inc., John Ballard, Steve Boulay and Bruce Granath, on the other hand, dated as of March 11, 2008 (17)

10.39		Employment Agreement dated as of March 11, 2008, between Tix Corporation and John Ballard (17)

10.40		Employment Agreement dated as of March 11, 2008, between Tix Corporation and Steve Boulay (17)

10.41		Employment Agreement dated as of March 11, 2008, between Tix Corporation and Bruce Granath (17)

10.43		Secured Convertible Note of One Million Dollars ($1,000,000), without interest, due August 10, 2010 (the “Maturity Date”), if not paid sooner, to Metin Durmas (18)

14.		Code of Ethics (4)

21		Subsidiaries of the Registrant (18)

23		Consent of Weinberg & Company, P.A. (18)

31.1		Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Officer’s Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Officer’s Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)	Previously filed as an Exhibit to the Company’s Registration Statement on Form S-3, as filed with the Securities and Exchange Commission on June 16, 1997, and incorporated herein by reference.

(2)	Previously filed as an Exhibit to the Company’s Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2001, and incorporated herein by reference.

(3)	Previously filed as an Exhibit to the Company’s Registration Statement on Form S-8, as filed with the Securities and Exchange Commission on March 3, 2004, and incorporated herein by reference.

(4)	Previously filed as an Exhibit to the Company’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on September 11, 2006, and incorporated herein by reference.

(5)	Previously filed as an Exhibit to the Company’s Schedule 14C Information Statement, as filed with the Securities and Exchange Commission on January 26, 2005, and incorporated herein by reference.

(6)	Previously filed as an Exhibit to the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004, and incorporated herein by reference.

(7)	Previously filed as an Appendix to the Company’s Schedule 14A Proxy Statement, as filed with the Securities and Exchange Commission on May 28, 2009, and incorporated herein by reference.

(8)	Intentionally deleted

(9)	Previously filed as an Exhibit to the Company’s Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2005, and incorporated herein by reference.

(10)	Intentionally deleted

(11)	Previously filed as an Exhibit to the Company’s Current Report on Form 8-K filed April 2, 2009, and incorporated herein by reference.

(12)	Intentionally deleted

(13)	Previously filed as an Exhibit to the Company’s Current Report on Form 8-K filed March 20, 2007, and incorporated herein by reference.

(14)	Previously filed as an Exhibit to the Company’s current report on Form 8- K , and filed August 7, 2007, and incorporated herein by reference.

(15)	Previously filed as an Exhibit to the Company’s Current Report on Form 8-K filed December 03, 2007, and incorporated herein by reference.

(16)	Previously filed as an Exhibit to the Company’s Current Report on Form 8-K filed March 5, 2008, and incorporated herein by reference.

(17)	Previously filed as an Exhibit to the Company’s Current Report on Form 8-K filed March 17, 2008, and incorporated herein by reference.

(18)	Filed and attached herewith.

(C)	Indicates compensatory plan, agreement or arrangement.

Tix CORP - FORM 10-K - March 16, 2010

Attached files

Tix CORP Reports