UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION




Washington,
      D.C. 20549





FORM
      10-Q





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




For
      the
      Quarterly Period Ended March 31, 2008





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 small business issuer as specified in its charter)





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





12001
      Ventura Place, Suite 340, Studio City, California 91604


(Address
      of principal executive offices)




Issuer’s
      telephone number, including area code: (818) 761-1002




Not
      applicable


(Former
      name, former address and former fiscal year, if changed since last
      report.)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the issuer 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 is a large
      accelerated filer, an accelerated filer, or a non-accelerated filer (as defined
      in Rule 12b-2 of the Exchange Act)




Large
              accelerated filer
            o
            
            Accelerated
              filer
            oNon-accelerated
              filer
            o
            
            Smaller
              reporting company
            x




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No x





As
      of May
      1, 2008, the Company had 30,356,856 shares of common stock, $0.08 par value,
      issued and outstanding.




Documents
      incorporated by reference: None.





Special
      Note Regarding Forward-Looking Statements:







This
      Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008
      contains "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, including statements that include the words “believes”,
“expects”, “anticipates”, “intends”, “plans”, “may”, “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
      Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008
      involve known and unknown risks, uncertainties and other factors that could
      cause the 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 throughout this Quarterly Report on Form 10-Q for the quarterly
      period ended March 31, 2008, 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 Quarterly Report on Form 10-Q for the quarterly
      period ended March 31, 2008, whether as a result of new information, future
      events or otherwise.















Tix
      Corporation and Subsidiaries





Index


PART
                I. FINANCIAL INFORMATION
            
            Page
                No.Item
                1. Financial StatementsCondensed
                Consolidated Balance Sheets - March 31,2008(Unaudited) and December
                31,
                2007Condensed
                Consolidated Statements of Operations (Unaudited) - Three Months
                and Nine
                Months Ended March 31, 2008and 2006Condensed
                Consolidated Statement of Stockholders’ Equity (Unaudited) - Three Months
                Ended March 31, 2008Condensed
                Consolidated Statements of Cash Flows (Unaudited) - Three Months
                Ended
                March 31, 2008and 2007Notes
                to Condensed Consolidated Financial Statements (Unaudited) - Three
                Months
                Months Ended March 31,2008and 2007Item
                2. Management’s Discussion and Analysis or Plan of
                OperationItem
                3. Controls and ProceduresPART
                II. OTHER INFORMATIONItem
                1. Legal ProceedingsItem
                2. Unregistered Sales of Equity Securities and Use of
                ProceedsItem
                3. Defaults upon Senior SecuritiesItem
                4. Submission of Matters to a Vote of Security HoldersItem
                5. Other InformationItem
                6. ExhibitsSIGNATURES






















**TIX
                CORPORATION AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED BALANCE SHEETS**




March
                  31, 2008
            
            
            December
                  31,
                2007**Assets**
            
            
            (Unaudited)Current
                assets:Cash
            
            $
            6,623,000
            
            $
            7,417,000Other
                receivable
            
            
            -
            
            
            345,000Accounts
                receivable, net
            
            
            4,312,000
            
            
            129,000Inventory
            
            
            4,240,000
            
            
            3,938,000Prepaid
                expenses and other current assets
            
            
            498,000
            
            
            178,000**Total
                current assets**
            
            
            15,673,000
            
            
            12,007,000Property
                and equipment:Office
                equipment and furniture
            
            
            1,544,000
            
            
            1,413,000Equipment
                under capital lease
            
            
            386,000
            
            
            386,000Leasehold
                improvements
            
            
            313,000
            
            
            313,0002,243,000
            
            
            2,112,000Less
                accumulated depreciation and amortization
            
            
            (781,000
            )
            
            (664,000
            )**Total
                property and equipment, net**
            
            
            1,462,000
            
            
            1,448,000Other
                assets:Intangible
                assets:Goodwill
            
            
            31,692,000
            
            
            27,115,000Intangible
                assets, net
            
            
            16,639,000
            
            
            14,524,000**Total
                intangible assets**
            
            
            48,331,000
            
            
            41,639,000Capitalized
                theatrical costs
            
            
            491,000Deposits
                and other assets
            
            
            75,000
            
            
            74,000**Total
                other assets**
            
            
            48,897,000
            
            
            41,713,000**Total
                assets**
            
            $
            66,032,000
            
            $
            55,168,000**Liabilities
                and Stockholders' Equity**Current
                liabilities:Accounts
                payable
            
            $
            2,829,000
            
            $
            1,945,000Accrued
                expenses
            
            
            4,726,000
            
            
            1,082,000Current
                portion of capital lease obligations
            
            
            46,000
            
            
            45,000Deferred
                revenue
            
            
            547,000
            
            
            54,000






1




**Total
                current liabilities**
            
            
            8,148,000
            
            
            3,126,000Non-current
                liabilities:Capital
                lease obligations, less current portion
            
            
            127,000
            
            
            108,000Deferred
                rent
            
            
            96,000
            
            
            188,000**Total
                non-current liabilities**
            
            
            223,000
            
            
            296,000**Stockholders’
                equity:**Preferred
                stock, $0.01 par value; 500,000 shares authorized;none
                issued
            
            
            —
            
            
            —Common
                stock, $0.08 par value; 100,000,000 shares authorized; 31,631,449
                shares
                and 30,402,325 shares at March 31, 2008 and December 31, 2007,
                respectively
            
            
            2,531,000
            
            
            2,432,000Additional
                paid-in capital
            
            
            86,389,000
            
            
            81,034,000Accumulated
                deficit
            
            
            (31,259,000
            )
            
            (31,720,000
            )**Total
                stockholders’ equity**
            
            
            57,661,000
            
            
            51,746,000**Total
                liabilities and Stockholders' Equity**
            
            $
            66,032,000
            
            $
            55,168,000





See
      notes
      to condensed consolidated financial statements


2





**TIX
                CORPORATION AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS****THREE
                MONTHS ENDED MARCH 31,**




2008
            
            
            2007(Unaudited)
            
            
            (Unaudited)Revenues
            
            $
            23,163,000
            
            $
            1,747,000Operating
                expenses:Direct
                costs of revenues
            
            
            16,730,000
            
            
            714,000Selling
                and marketing expenses.
            
            
            1,377,000
            
            
            192,000General
                and administrative expenses, including non-cash equity-based costs
                of
                $602,000 and $395,000 in 2008 and 2007, respectively (including
                $277,000 and $43,000 for officers and directors in 2008 and 2007,
                respectively).
            
            
            3,462,000
            
            
            1,298,000Depreciation
                and amortization
            
            
            1,122,000
            
            
            64,000Total
                costs and expenses
            
            
            22,691,000
            
            
            2,268,000Operating
                income (loss)
            
            
            472,000
            
            
            (521,000
            )Other
                income (expense):Other
                income
            
            
            43,000
            
            
            -Interest
                income
            
            
            34,000
            
            
            8,000Interest
                expense
            
            
            (6,000
            )
            
            (7,000
            )Other
                income (expense), net
            
            
            71,000
            
            
            1,000Income
                (loss) from operations
            
            
            543,000
            
            
            (520,000
            )Current
                income tax expense
            
            
            82,000
            
            
            -Net
                income (loss)
            
            $
            461,000
            
            $
            (520,000
            )Net
                income (loss) per common share -Basic
            
            $
            0.02
            
            $
            (0.03
            )Diluted
            
            $
            0.01
            
            $
            (0.03
            )Weighted
                average common shares outstanding -Basic
            
            
            30,642,823
            
            
            18,705,939Diluted
            
            
            32,493,343
            
            
            18,705,939


See
      notes
      to condensed consolidated financial statements







3





**TIX
                CORPORATION AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY****THREE
                MONTHS ENDED MARCH 31, 2008 (Unaudited)**




**Total****Accumulated**
            
            
            **Stockholders’****Shares**
            
            
            **Amount**
            
            
            **APIC**
            
            
            **Deficit**
            
            
            **Equity**Balance,
                December 31, 2007
            
            
            30,402,325
            
            $
            2,432,000
            
            $
            81,034,000
            
            $
            (31,720,000
            )
            $
            51,746,000Issuance of
                common stock to consultants
            
            
            37,500
            
            
            3,000
            
            
            185,000
            
            
            -
            
            
            188,000Issuance
                of common stock to officers and employees
            
            
            54,167
            
            
            4,000
            
            
            8,000
            
            
            -
            
            
            12,000Issuance
                of common stock upon exercise of warrants and options
            
            
            89,839
            
            
            8,000
            
            
            (8,000
            )
            
            -
            
            
            -Fair
                value of options issued to employees
            
            
            -
            
            
            -
            
            
            402,000
            
            
            -
            
            
            402,000Issuance
                of common stock for acquisition of Magic Arts &
                Entertainment
            
            
            476,190
            
            
            38,000
            
            
            2,219,000
            
            
            -
            
            
            2,257,000Issuance
                of common stock for acquisition of NewSpace Entertainment
            
            
            571,428
            
            
            46,000
            
            
            2,549,000
            
            
            -
            
            
            2,595,000Net
                Income for the Period
            
            
            
            
            
            
            
            
            
            
            
            461,000
            
            
            461,000Balance,
                March 31, 2008
            
            
            31,631,449
            
            $
            2,531,000
            
            $
            86,389,000
            
            $
            (31,259,000
            )
            $
            57,661,000





See
      notes
      to condensed consolidated financial statements. ****


4




**TIX
                CORPORATION****CONDENSED
                STATEMENTS OF CASH FLOW****FOR
                THE THREE MONTHS ENDED MARCH 31,**




2008
            
            
            2007(Unaudited)
            
            
            (Unaudited)Cash
                flows from operating activities:Net
                income (loss)
            
            $
            461,000
            
            $
            (520,000
            )Adjustments
                to reconcile net loss to cash provided by (used in)   operating
                activities:Depreciation
                and amortization
            
            
            117,000
            
            
            45,000Amortization
                of intangible assets
            
            
            1,006,000
            
            
            19,000Fair
                valued common stock issued for services
            
            
            188,000
            
            
            389,000Fair
                value of options issued to employees
            
            
            414,000
            
            
            106,000Fair
                value of warrants issued to consultants
            
            
            
            
            
            -Change
                in allowance of inventory-purchase accounting
            
            
            115,000
            
            
            -Common
                stock issued to employees
            
            
            -
            
            
            -(Increase)
                decrease in:Accounts
                receivable
            
            
            (3,719,000
            )
            
            (242,000
            )Inventory
            
            
            (3,000
            )
            
            (980,000
            )Prepaid
                expenses and other current assets
            
            
            101,000
            
            
            (13,000
            )Deposits
                and other assets
            
            
            (2,000
            )
            
            (5,000
            )Accounts
                payable and accrued expenses
            
            
            3,482,000
            
            
            421,000Deferred
                revenue
            
            
            484,000
            
            
            339,000Deferred
                rent
            
            
            (61,000
            )
            
            1,000Net
                cash provided by (used in) operating activities
            
            
            2,583,000
            
            
            (440,000
            )Cash
                flows from investing activities:Purchases
                of property and equipment
            
            
            (131,000
            )
            
            (93,000
            )Purchase
                of Magic Arts & Entertainment
            
            
            (2,133,000
            )
            
            -Purchase
                of NewSpace Entertainment
            
            
            (1,456,000
            )
            
            -Purchase
                of ticket inventory from AnyEvent
            
            
            -
            
            
            (96,000
            )Acquisition
                of AnyEvent
            
            
            -
            
            
            (300,000
            )Net
                cash used in investing activities
            
            
            (3,720,000
            )
            
            (489,000
            )Cash
                flows from financing activities:Payments
                on capital lease obligations
            
            
            (10,000
            )
            
            (13,000
            )


Net
                proceeds from exercise of options and warrants
            
            
            -
            
            
            148,000Net
                cash provided by financing activities
            
            
            (10,000
            )
            
            135,000Change
                in Cash:Net
                increase
            
            
            (1,146,000
            )
            
            (794,000
            )Balance
                at beginning of period
            
            
            7,769,000
            
            
            1,944,000Balance
                at end of period
            
            $
            6,623,000
            
            $
            1,150,000





5





Three
                months ended March 31,2008
            
            
            2007Supplemental
                disclosures of cash flow information:Cash
                paid forIncome
                taxes
            
            $
            -
            
            $
            -Interest
            
            $
            -
            
            $
            7,000Non-cash
                investing and financing activities:Issuance
                of 476,190 shares of common stock in conjunction with the acquisition
                of
                Magic Arts & Entertainment - Florida, Inc.
            
            $
            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 the acquisition
                of
                John's Tickets, LLC.
            
            
            -
            
            
            550,000







See
      notes
      to condensed consolidated financial statements ****


6





**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**Note
      1 - Summary of Significant Accounting Policies**




***Nature
      of Business***





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 effective March 3, 2005. Tix Corporation is an integrated
      entertainment company focusing on ticketing services, event merchandising and
      the production and promotion of live entertainment. We operate three
      complimentary business units; Tix4Tonight provides our last minute ticketing
      and
      premium ticketing services, Exhibit Merchandising (EM) provides our branded
      merchandise sales and services and our newly formed subsidiary Tix Productions
      Inc. (TPI) provides live entertainment.




***Operating
      Segments***





**Ticketing
      Services**




Our
      ticketing services are carried out by our wholly owned subsidiary Tix4Tonight.
      Tix4Tonight offers both the sale of premium, and discount tickets. When selling
      discounted tickets Tix4Tonight generally sells them under short-term,
      non-exclusive agreements with approximately 75 Las Vegas shows, out of a total
      of approximately 90 Las Vegas shows running at any one time, and typically
      offers tickets for more than 60 shows on any given day at a discount plus a
      service fee. Tix4Tonight 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. Additionally, Tix4Tonight also offers
      discounted entrée tickets to approximately 20 Las Vegas area restaurants and
      discounted golf tee times to more than 30 Las Vegas golf courses.




Tix4Tonight
      though dba Tix4Any Event, a national event ticket broker sells premium tickets
      for sporting events, concerts, tours and theatre. Tix4Any Event operations
      are
      located in the administrative offices of Tix4Tonight.




***Exhibit
      and Event Merchandising***





The
      Company provides first-class 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 turn-key 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.”




***Live
      Entertainment***




In
      December 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 are independent
      presenters of live theater and concerts with a history of working together.
      It
      is the Company’s intention to combine 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 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 equity and marketplace
      recognition those entities have.




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 eight
      US
      cities, our Salt Lake City based group sales team and standard marketing tools
      including print, radio, television, outdoor and internet-mediated marketing
      tools. In addition we invest in shows or productions in advance of their initial
      tour to obtain favorable touring and distribution rights.




****** ***Seasonality***




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 is expects to record the majority of its revenues in
      the
      first, second and fourth quarters. 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 believe that we have sufficient
      financial flexibility to fund these fluctuations and to access capital markets
      on satisfactory terms and in adequate amounts, although there can be no
      assurance that this will be the case. We expect cash flows from operations
      and
      other financing alternatives, to satisfy working capital, and capital
      expenditures for at least the succeeding year.




***Preparation
      of Interim Financial Statements***




The
      consolidated financial statements included in this report have been prepared
      by
      the Company pursuant to the rules and regulations of the Securities and Exchange
      Commission (“SEC”) and, in the opinion of management, include all adjustments
      (consisting of normal recurring accruals and adjustments necessary for adoption
      of new accounting standards) necessary to present fairly the results of the
      interim periods shown. Certain information and footnote disclosures normally
      included in financial statements prepared in accordance with generally accepted
      accounting principles in the United States have been condensed or omitted
      pursuant to such SEC rules and regulations. Management believes that the
      disclosures made are adequate to make the information presented not misleading.
      Due to seasonality and other factors, the results for the interim periods are
      not necessarily indicative of results for the full year. The financial
      statements contained herein should be read in conjunction with the consolidated
      and combined financial statements and notes thereto included in the Company’s
      2007 Annual Report on Form 10-K.







**Note
      -2.  Summary of Significant Accounting Policies**







***Revenue
      Recognition, Presentation and Concentrations:***




The
      Company has several streams of income, each of which is required under 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.




Tix4Dinner
      offers reservations for discounted dinners at various restaurants on the Las
      Vegas strip, with dining at specific times on the same day as the sale.
      Tix4Dinner recognizes as revenue the transaction fees earned from the booking
      of
      dinner reservations at the time that the reservations are made. At this time,
      the Company has minor accounts receivable and no 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. The restaurants pay the Company a fee per guest.




8




Tix4Golf
      recognizes as revenue the difference between how much it charges its customers
      for tee-times and how much it pays golf courses for tee-times. The revenue
      per
      tee-time, as well as the cost per tee-time, will vary, depending on the
      desirability of the golf course and tee-time, weather, time of year and several
      other factors. Revenue per tee-time is significantly higher when tee-times
      are
      guaranteed or pre-bought in large quantities. Tee-times are generally sold
      the
      day before or the day of the tee-time, however, tee-times may be booked in
      advance. Revenue is not recognized until the day of the tee-time. The Company
      does not have any accounts receivable associated with this business, as all
      transactions are paid for at the time of purchase.




Tix4AnyEvent
      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.Tix4AnyEvent 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. All sales are net of discounts and returns and
      exclude sales tax. 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 our websites are included as a component
      of
      net sales. The Company does not have any accounts receivable associated with
      this business, as all transactions are done by credit card.




On
      January 1, 2008 the Company began its live entertainment segment. Revenue from
      the presentation and production of an event is recognized after the performance
      occurs upon settlement of the event; however any profits related to these tours
      is recognized after minimum revenue thresholds, if any have been achieved.
      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.




***Consolidation:***




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




***Accounts
      receivable and credit policies:***




Accounts
      receivable are primarily associated with the revenues of shows in the process
      of
      being settled. Accounts receivable are stated at the amount management expects
      to collect from the outstanding balances. Management provides for probable
      uncollectible amounts as a charge to operations during the period in which
      such
      determination is made based upon its assessment of the collectability of
      individual accounts. Balances that remain outstanding after reasonable
      collection efforts are written off. The amount charged to operations to reflect
      uncollectible accounts receivable bad debt expense has not been material to
      the
      financial statements periods presented.




***Capitalization
      of Theatrical Production Development Costs:***




Consistent
      with SOP 00-2 for the capitalization of certain film production and development
      costs and by analogy applied to theatrical productions the Company capitalizes
      costs incurred in the development of its theatrical productions. Costs
      capitalized by the Company include, but are not limited to, payments to
      directors, authors, composers, crews and other expenses directly associated
      with
      bringing a production to market. Management periodically reviews each theatrical
      production and will write down or write-off those capitalized costs if
      management determines the likelihood these costs will be recouped or to receive
      earnings from all sources related to the production has diminished. The Company
      amortizes these capitalized costs when the production is open to the public
      or
      is licensed to a third party. At March 31, 2008, the Company had $491,000
      of capitalized costs, of which $400,000 relates to the theatrical rights of
      101
      Dalmatians.  The shows that these deferred costs relate will begin staging
      in the second half of 2008 and 2009.




9




***Purchase
      Accounting***




The
      Company accounts for its business acquisitions under the purchase method of
      accounting. The total cost of acquisitions is allocated to the underlying
      identifiable net assets based on their respective estimated fair values. The
      excess of the purchase price over the estimated fair values of the assets
      acquired is recorded as goodwill. Determining the fair value of the assets
      acquired and liabilities assumed requires management’s judgment and often
      involves the use of significant estimates and assumptions with respect to future
      cash flows, discount rates, asset lives and market multiples, among other items.
      In addition, reserves have been established on the Company’s balance sheet
      related to acquired liabilities and qualifying restructuring costs and
      contingencies based on assumptions made at the time of acquisition. The Company
      evaluates these reserves on a regular basis to determine the adequacies of
      the
      amounts.




***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 using SFAS No. 123R effective January 1, 2006, for all
      share-based payments granted based on the requirements of SFAS No. 123R for
      all awards granted to employees. The Company accounts for stock option and
      warrant grants issued and vesting to non-employees in accordance with EITF
      No.
      96-18: "Accounting for Equity Instruments that are Issued to Other Than
      Employees for Acquiring, or in Conjunction with Selling, Goods or Services” and
      EITF 00-18 “Accounting Recognition for Certain Transactions involving Equity
      Instruments Granted to Other Than Employees” 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.




***Intangible
      Assets:***




The
      Company accounts for intangibles in accordance with Statement of Financial
      Accounting Standards No. 141, “Business Combinations” and Statement of Financial
      Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”
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 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 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.  At March 31, 2008, we relinquished our rights to purchase
      Cleveland Browns and Cleveland Cavaliers season tickets, acquired through the
      purchase of Tix4AnyEvent. As a result, a one-time charge of $25,000 was recorded
      to amortization of intangible expense to reduce the value of the related
      intangible asset. There were no other indications of impairment based on
      management’s assessment at March 31, 2007.




***Income
      Taxes:***




10




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 bases 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.




The
      Company adopted the provisions of FIN48 on January 1, 2007. Fin 48 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 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 of Financial Instruments:***




The
      carrying amounts of financial instruments, including cash, accounts and other
      receivables, accounts payable and accrued liabilities, and short-term loans
      approximate fair value because of their short maturity. The carrying amounts
      of
      capital lease obligations approximate fair value because the related
      effective interest rates on these instruments approximate the rates currently
      available to the Company.




Effective
      January 1, 2008, the Company adopted Statement of Financial Accounting Standards
      (SFAS) No. 157, Fair Value Measurements. This Statement defines fair value
      for
      certain financial and nonfinancial assets and liabilities that are recorded
      at
      fair value, establishes a framework for measuring fair value, and expands
      disclosures about fair value measurements. This guidance applies to other
      accounting pronouncements that require or permit fair value measurements. On
      February 12, 2008, the FASB finalized FASB Staff Position (FSP) No.157-2,
      Effective Date of FASB Statement No. 157. This Staff Position delays the
      effective date of SFAS No. 157 for nonfinancial assets and liabilities to fiscal
      years beginning after November 15, 2008 and interim periods within those fiscal
      years, except for those items that are recognized or disclosed at fair value
      in
      the financial statements on a recurring basis (at least annually). The adoption
      of SFAS No. 157 had no effect on the Company’s consolidated financial position
      or results of operations.






***Cash
      Concentrations:***




The
      Company's cash balances on deposit with banks are guaranteed up to $100,000
      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 $100,000 insurance
      limit as of March 31, 2008 and December 31, 2007.




***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 are minor in 2007. The Company began operating
      in the United Kingdom in November 2007, with the opening of its exhibit shop
      at
      the O2 for “Tutankhamen and The Golden Age of the Pharaohs.” Additionally, in
      March 2008, the Company opened a second exhibit shop in Vienna, Austria for
      “Tutankamun and the World of the Pharaohs.” Foreign currency gains and losses
      are included in operations.




***Net
      Income (Loss) Per Common Share:***





Statement
      of Financial Accounting Standards No. 128, “Earnings Per Share,” requires
      presentation of basic earnings per share (“Basic EPS”) and diluted earnings per
      share (“Diluted EPS”). Basic earnings (loss) per share is computed by dividing
      income (loss) available to common stockholders by the weighted average number
      of
      common shares outstanding during the period. The diluted earnings per share
      calculation give effect to all potentially dilutive common shares outstanding
      during the period using the treasury stock method. These potentially dilutive
      securities were included in the calculation of earnings per share for the three
      months ended March 31, 2008, but were not included in the calculation of loss
      per share for the three months ended March 31, 2007, because the Company
      incurred a loss during that period and thus their effect would have been
      anti-dilutive. Accordingly, basic and diluted loss per share is the same for
      the
      three months March 31, 2007.March 31, 2008. At March 31, 2008 we had outstanding
      warrants and stock options to acquire an aggregate of 3.9 million shares
      and 1.3 million shares, respectively






11





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.




***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.




***Advertising
      Costs:***







Advertising
      costs are charged to operations as selling and marketing expenses at the time
      the costs are incurred. For the three months ended March 31, 2008 and 2007,
      advertising costs were $2,216,000 and $177,000, respectively.




***Impairment
      of Long-Lived Assets:***







Statement
      of Financial Accounting Standards No. 144, “Accounting for the Impairment or
      Disposal of Long-Lived Assets” (“SFAS No. 144”), 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. SFAS No. 144 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 March 31, 2008 or
      December 31, 2007 .




***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
      December 2007, the FASB issued FASB Statement No. 141 (R), “Business
      Combinations” (FAS 141(R)), which establishes accounting principles and
      disclosure requirements for all transactions in which a company obtains control
      over another business. Statement 141(R) applies prospectively to business
      combinations for which the acquisition date is on or after the beginning of
      the
      first annual reporting period beginning on or after December 15, 2008. Earlier
      adoption is prohibited.




12




In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements, an amendment of ARB No. 51”. SFAS No. 160
      establishes accounting and reporting standards that require that the ownership
      interests in subsidiaries held by parties other than the parent be clearly
      identified, labeled, and presented in the consolidated statement of financial
      position within equity, but separate from the parent’s equity; the amount of
      consolidated net income attributable to the parent and to the noncontrolling
      interest be clearly identified and presented on the face of the consolidated
      statement of income; and changes in a parent’s ownership interest while the
      parent retains its controlling financial interest in its subsidiary be accounted
      for consistently. SFAS No. 160 also requires that any retained noncontrolling
      equity investment in the former subsidiary be initially measured at fair
      value when a subsidiary is deconsolidated. SFAS No. 160 also sets forth the
      disclosure requirements to identify and distinguish between the interests of
      the
      parent and the interests of the noncontrolling owners. SFAS No. 160 applies
      to
      all entities that prepare consolidated financial statements, except
      not-for-profit organizations, but will affect only those entities that have
      an
      outstanding noncontrolling interest in one or more subsidiaries or that
      deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and
      interim periods within those fiscal years, beginning on or after December 15,
      2008. Earlier adoption is prohibited. SFAS No. 160 must be applied prospectively
      as of the beginning of the fiscal year in which it is initially applied, except
      for the presentation and disclosure requirements. The presentation and
      disclosure requirements are applied retrospectively for all periods presented.





In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities - an amendment of FASB Statement No. 133” (“SFAS No.
      161”). SFAS No. 161 amends and expands the disclosure requirements of SFAS No.
      133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No.
      133”). The objective of SFAS No. 161 is to provide users of financial statements
      with an enhanced understanding of how and why an entity uses derivative
      instruments, how derivative instruments and related hedged items are accounted
      for under SFAS No. 133 and its related interpretations, and how derivative
      instruments and related hedged items affect an entity’s financial position,
      financial performance, and cash flows. SFAS No. 161 requires qualitative
      disclosures about objectives and strategies for using derivatives, quantitative
      disclosures about fair value amounts of and gains and losses on derivative
      instruments, and disclosures about credit-risk-related contingent features
      in
      derivative agreements. SFAS No. 161 applies to all derivative financial
      instruments, including bifurcated derivative instruments (and nonderivative
      instruments that are designed and qualify as hedging instruments pursuant to
      paragraphs 37 and 42 of SFAS No. 133) and related hedged items accounted for
      under SFAS No. 133 and its related interpretations. SFAS No. 161 also amends
      certain provisions of SFAS No. 131. SFAS No. 161 is effective for financial
      statements issued for fiscal years and interim periods beginning after November
      15, 2008, with early application encouraged. SFAS No. 161 encourages, but does
      not require, comparative disclosures for earlier periods at initial adoption.
      The Company has not yet determined the effect on its consolidated financial
      statements, if any, upon adoption of SFAS No. 161.





The
      Company does not believe the adoption of the above recent pronouncements, with
      the exception of FAS 141(R), will have a material effect on the Company’s
      consolidated results of operations, financial position, or cash flows. FAS
      141(R) introduces significant changes to the accounting for and reporting of
      business combinations, continuing the movement toward greater use of fair values
      in financial reporting and expanded disclosures. FAS 141(R) impacts the annual
      goodwill impairment test associated with acquisitions that occurred prior to
      the
      standard's effective date and acquisitions closing after the effective date.
      Thus, companies such as us that have goodwill from an acquisition that closed
      prior to the standard's effective date will need to understand the provisions
      of
      FAS 141(R). Management is currently evaluating the potential effects of FAS
      141(R) on its currently recorded goodwill, as well as any goodwill that could
      be
      recorded as result of a future acquisition.





**Note
      3. - Acquisitions**




During
      the three months ended March 31, 2008 the Company acquired Magic Arts and
      Entertainment, LLC and NewSpace Entertainment, LLC. On January 2, 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. As such,
      the
      Company has included the results of operation of Magic Arts and New Space
      Entertainment 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.




13




***Magic
      Arts and Entertainment:***




On
      February 29, 2008 we completed our merger acquisition of Magic Arts &
Entertainment -Florida, Inc., a privately held Florida corporation (“Magic”).
      Pursuant to the Merger Agreement and Plan of Merger, we paid to the two
      stockholders of Magic $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.
      Additionally, we will be obliged to issue to the former Magic stockholders
      a
      total of up to 380,952 additional shares of our common stock if certain EBITDA
      milestones are achieved during the next thirty-six months. These milestones
      are
      based upon the results of Tix Productions, Inc. (“TPI”), a wholly owned
      subsidiary of the Company that will focus on providing live entertainment.




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




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 will 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 employment agreement.




Mr.
      Marsh
      is entitled under his employment agreement to an annual salary of $100,000.
      Under his 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.




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 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 is a shareholder of Tix prior to its acquisition of Magic
      and presently owns approximately 15% of Tix's common stock.




The
      acquisition of Magic Arts & Entertainment - Florida has been accounted for
      as a purchase in accordance with SFAS No. 141, “Business Combinations,” and the
      operations of the company have been consolidated commencing with the closing
      of
      the transaction. The $4.0 million purchase price was allocated on the following
      basis, which was based upon the fair value of the acquired assets, as determined
      by Gemini Valuation Services, an independent valuation firm. This valuation
      is
      still subject to change and revision may occur in the assigned value. The
      Company does not believe any changes or revisions will be
      significant.





Tangible
                assets, net of accounts payable assumed:
            
            $
            279,000Intangible
                assets:Employment
                Agreement
            
            
            1,580,000Technology-based
            
            
            5,000Contract
            
            
            75,000Goodwill
            
            
            1,989,000Purchase
                price
            
            $
            3,928,000








14




*NewSpace
      Entertainment*




On
      March
      11, 2008 we completed our merger acquisition (the “Merger”) of NewSpace
      Entertainment, Inc., a privately held Utah corporation (“NewSpace”). Pursuant to
      the Merger, 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 intend to carry on NewSpace’s
      business through Tix Productions, Inc. (“TPI”), a newly formed wholly owned
      subsidiary of the Company that will focus on providing live
      entertainment.




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 will serve as President,
      Chief Operating Officer and Vice President - Marketing, respectively, of 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 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 such annual salaries of at least 3% per
      annum.




In
      the
      event the termination by us of employment of any of Messrs. Ballard, Boulay
      and
      Granath “without cause” (as defined in their respective employment agreements)
      or termination 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 each of Messrs. Ballard, Boulay and Granath or their personal
      representatives, as the case may be, the annual salary under his employment
      agreement for six months.




Under
      their employment agreements, if Messrs. Ballard, Boulay and Granath are
      terminated “for cause” 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.







The
      acquisition of NewSpace Entertainment has been accounted for as a purchase
      in
      accordance with SFAS No. 141, “Business Combinations,” and the operations of the
      company have been consolidated commencing with the closing of the transaction.
      The $4.0 million purchase price was allocated on the following basis, which
      was
      based upon the fair value of the acquired assets, as determined by Gemini
      Valuation Services, an independent valuation firm. This valuation is still
      subject to change and revision may occur in the assigned value. The Company
      does
      not believe any changes or revisions will be significant.








Liabilities
                assumed in excess of tangible assets:
            
            $
            (28,000)Intangible
                assets:Licensing
                Contracts
            
            
            62,000Employment
                Agreements
            
            
            1,394,000Technology-based
            
            
            5,000Goodwill
            
            
            2,580,000Purchase
                price
            
            $
            4,013,000


**Pro
        forma financial information (unaudited)**
 
 The
        unaudited financial information in the table below summarizes the combined
        results of operations of the Company and Exhibit Merchandising (acquired
        August
        2007) , Magic Arts & Entertainment (acquired January 1, 2008) and NewSpace
        Entertainment (acquired January 1, 2008) on a pro forma basis, as though
        the
        companies had been combined as of the beginning of each of the period presented.
        As NewSpace came into existence on July 1, 2007, no revenues or expenses
        are
        included in this pro forma. The pro forma financial information is presented
        for
        informational purposes only and is not indicative of the results of operations
        that would have been achieved if the these acquisitions had taken place at
        the
        beginning of the period presented.
 
 The
        pro
        forma financial information for the period presented includes the business
        combination accounting effect on the amortization charges from acquired
        intangible assets, acquisition costs reflected in the Company’s and the acquired
        companies’ historical statements of operations for the period prior to the asset
        purchase, and the related tax effects.
 
 The
        unaudited pro forma financial information for the three months ended March
        31,
        2007 combines the historical results for the Company for that period, with
        the
        historical results for the companies acquired as a separate entity, for the
        three months ended March 31, 2007 (in thousands, except per share
        data).
  Three
                  months ended March 31,2007Total
                  revenues
              
              $
              9,128,000Net
                  (loss)
              
              
              (277,000
              )Basic
                  net income per share
              
              $
              (0.01
              )Diluted
                  net income per share
              
              $
              (0.01
              )




**4.
      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 March 31, 2008.




15




**Estimated**
            
            
            **Original**
            
            
            **Accumulated**
            
            
            **Net
                Carrying****Useful Lives**
            
            
            **Cost**
            
            
            **Amortization**
            
            
            **Amount**Marketing
                Based
            
            
            3-6
                years
            
            $
            12,277,000
            
            $
            1,338,000
            
            $
            10,939,000Contract
                commitments
            
            
            3
                years
            
            
            5,891,000
            
            
            790,000
            
            
            5,101,000Customer
                relationships
            
            
            3
                years
            
            
            612,000
            
            
            218,000
            
            
            394,000Technology
                Based
            
            
            3
                years
            
            
            111,000
            
            
            36,000
            
            
            75,000Intellectual
                property (e.g. domain names)
            
            
            5
                years
            
            
            130,000
            
            
            —
            
            
            130,000Goodwill
            
            
            indefinite
            
            
            31,692
                ,000
            
            
            —
            
            
            31,692,000Total
            
            
            
            
            $
            50,713,000
            
            $
            2,382,000
            
            $
            48,331,000





Total
      amortization expense related to intangible assets in the three months ending
      March 31, 2008 and 2007 was $1,138,000 and $21,000, respectively. Total
      estimated amortization expense with respect to intangible assets for 2008 though
      2013 is as follows:





Years
                Ending December 31,2008
            
            $
            2,963,0002009
            
            
            3,813,0002010
            
            
            3,242,0002011
            
            
            2,655,0002012
            
            
            2,655,0002013
            
            
            1,237,000Beyond
                2013
            
            
            74,000Total
            
            $
            17,130,000





**5. Obligations
      under Capital Leases**





The
      Company has entered into various capital leases for equipment with monthly
      payments ranging from $33 to $1,767 per month, including interest, at interest
      rates ranging from 9.8% to 19.7% per annum. At March 31, 2008, monthly payments
      under these leases aggregated $5,000. The leases expire at various dates through
      2012.





At
      March
      31, 2008 and 2007, property and equipment included assets under capital leases
      of $386,000, less accumulated amortization of $246,000 and $181,000,
      respectively.




Minimum
      future payments under capital lease obligations are as follows:




Years
                Ending December 31,2008
            
            $
            46,0002009
            
            
            58,0002010
            
            
            61,0002011
            
            
            3,0002012
            
            
            2,000Total
                payments
            
            
            170,000Less:
                amount representing interest
            
            
            (28,000
            )Present
                value of minimum lease payments
            
            
            142,000Less:
                current portion
            
            
            (46,000
            )Non-current
                portion
            
            $
            96,000








16





**6. Related
      Party Transactions**





During
      2008 and 2007, Benjamin Frankel, a director of the Company, was a principal
      in
      Frankel, LoPresti & Co., an accountancy corporation that provides tax
      advisory and preparation services to the Company. For the three months ended
      March 31, 2007, we paid Mr. Frankel or his firm for tax preparation and
      advisory services $15,000. No expenses have been incurred for the three months
      ended March 31, 2008.





**7.
      Stock-Based Compensation Plans**





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





Consultant
      Stock Plan:




Mr.
      Joseph Marsh, a greater than 10% shareholder of Tix,
      was a principal in Magic Arts and Entertainment - Florida, Inc., a company
      Tix
      acquired on January 1, 2008.  For more details regarding the purchase of
      Magic, see Note 3. -  Acquisitions.





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 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 March 31, 2008, 715,243 common
      shares were reserved for issuance under the Consultant Stock 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 three months ended March 31, 2008, the Company did not issue options to
      purchase shares of its common stock under the 2004 Option Plan. As of March
      31,
      2008, options to purchase 163,000 shares of common stock were reserved for
      issuance under the 2004 Option Plan.




17




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 240,000 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. The Company has not issued
      any
      options under the 2004 Directors Option Plan during the three months ended
      March
      31, 2008. A summary of the combined stock option activity during the year ended
      December 31, 2007 and three months ended March 31, 2008 for the three plans
      discussed above is as follows:





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:





2008
            
            
            2007Risk
                free rate of return
            
            
            4
            %
            
            4
            %Option
                lives in years
            
            
            6
            
            
            6Annual
                volatility of stock price
            
            
            112.5
            %
            
            112.5
            %Dividend
                yield







Number
                of
              options
            
            
            Weighted
                average
                exercise
                priceBalance
                outstanding, January 1, 2007
            
            
            451,500
            
            
            2.05Options
                granted
            
            
            847,000
            
            
            6.94Options
                exercised
            
            
            (1,000
            )
            
            0.39Options
                expired or forfeited
            
            
            (9,000
            )
            
            6.85Balance
                outstanding, December 31, 2007
            
            
            1,288,500
            
            $
            5.24Options
                granted
            
            
            -
            
            
            -Options
                exercised
            
            
            (500
            )
            
            0.39Options
                expired or forfeited
            
            
            -
            
            
            -Balance
                outstanding, March 31, 2008
            
            
            1,288,000
            
            $
            5.24Balance
                exercisable, March 31, 2008
            
            
            335,000
            
            $
            2.33




18




The
      intrinsic value of outstanding stock options at March 31, 2008 was $1,259,000,
      as compared to $793,000 at March 31, 2007. The intrinsic value of exercisable
      stock options at March 31, 2008 was $989,000, as compared to $545,000 at March
      31, 2007. Information relating to outstanding stock options at March 31, 2008,
      summarized by exercise price, is as follows:




**Outstanding**
            
            **Exercisable**Exercise
                Price Per Share
            
            **Shares**
            
            **Life**
              **(Years)**
            
            **Exercise Price**
            
            **Shares**
            
            **Weighted**
              **Average Exercise**
              **Price**$6.00
                - $7.20
            
            
            818,000
            
            
            9.4
            
            $
            7.01
            
            
            65,000
            
            $
            7.08$4.00
                - $5.99
            
            
            120,000
            
            
            5.6
            
            $
            4.05
            
            
            20,000
            
            
            4.30$2.00
                - $3.99
            
            
            200,000
            
            
            4.4
            
            $
            2.51
            
            
            100,000
            
            
            2.02$0.22
                - $1.99
            
            
            150,000
            
            
            1.4
            
            $
            0.22
            
            
            150,000
            
            
            0.221,288,000
            
            
            7.3
            
            $
            5.24
            
            
            335,000
            
            $
            2.33




For
      the
      three months ended March 31, 2008 and 2007, the value of options vesting during
      the period was $402,000 and $108,000 respectively. As of March 3131, 2008,
      the
      Company has outstanding unvested options with future compensation costs of
      $3.7
      million, which will be recorded as compensation cost as the options vest over
      their remaining average life of 7.1 years.




The
      assumptions used in calculating the fair value of the options granted during
      2007, using the Black-Scholes option-pricing model were as follows: risk free
      interest rate - 4%; expected life - 6 years; estimated volatility - 112.5%;
      dividends - $0.





A
      summary
      of warrant activity for the year ended December 31, 2007 and three months ended
      March 31, 2008 is as follows:






Number
              of
              warrants
            
            
            Weighted
                average
                exercise
                priceBalance
                outstanding, January 1, 2007
            
            
            2,829,796
            
            $
            0.52Warrants
                granted
            
            
            2,372,007
            
            
            5.47Warrants
                exercised
            
            
            (1,229,796
            )
            
            0.48Warrants
                expired
            
            
            -Balance
                outstanding, December 31, 2007
            
            
            3,972,007
            
            
            3.54Warrants
                grantedWarrants
                exercised
            
            
            (100,000
            )
            
            0.50Warrants
                expired
            
            
            --
            
            
            -Balance
                outstanding, March 31, 2008
            
            
            3,872,007
            
            $
            3.54






19





The
      intrinsic value of outstanding warrants at March 31, 2008 was $6.5 million,
      as
      compared to $7.6 million at March 31, 2007. Information relating to outstanding
      warrants at March 31, 2008, summarized by exercise price, is as follows:




Outstanding
            
            
            
            ExercisableExercise
                Price Per Share
            
            Shares
            
            Life
              (Years)
            
            Exercise
              Price
            
            Shares
            
            Weighted
              Average
              Exercise
              Price$2.00
                - $5.50
            
            
            2,372,007
            
            
            2.24
            
            $
            5.47
            
            
            2.372,007
            
            $
            5.47$0.36
                - $1.99
            
            
            1,500,000
            
            
            0.83
            
            $
            0.50
            
            
            1,500,000
            
            $
            0.503,872,007
            
            
            1.69
            
            $
            3.54
            
            
            3,872,007
            
            $
            3.54





**8. Income
      Taxes**





At
      March
      31, 2008, the Company had Federal net operating loss carryforwards of
      approximately $25.8 million expiring beginning in 2008 in varying amounts
      through 2027. The Company also had California state net operating loss
      carryforwards of approximately $700,000 expiring beginning in 2013 in varying
      amounts through 2016.





SFAS
      No.
      109 requires that a valuation allowance be established when it is more likely
      than not that all or a portion of deferred tax assets will not be realized.
      Due
      to the restrictions imposed by Internal Revenue Code Section 382 regarding
      substantial changes in ownership of companies with loss carryforwards, the
      utilization of the Company’s net operating loss carryforwards will likely be
      limited as a result of cumulative changes in stock ownership. As a result of
      the
      limitations related to Internal Revenue Code Section 382 and the Company’s lack
      of history of profits such, the Company recorded a 100% valuation allowance
      against its net deferred tax assets as of March 31, 2008 and 2007.





The
      tax
      effects of temporary differences that give rise to a significant portion of
      the
      deferred tax assets at March 31, 2007 and 2006 are presented below:




March
                31,2008
            
            2007Deferred
                tax assetsNet
                operating loss carryforward
            
            $
            18,457,000
            
            $
            3,682,000Use
                of NOL
            
            
            (176,000)Less:
                Valuation allowance
            
            
            (18,281
                ,000
            )
            
            (3,682,000
            )Net
                deferred tax asset
            
            $
            -
            
            $
            -




As
      a
      result of the Company’s significant operating loss carryforwards and the
      corresponding valuation allowance, no income tax benefit has been recorded
      at
      March 31, 2008 and 2007. The provision for income taxes using the statutory
      federal tax rate as compared to the Company’s effective tax rate is summarized
      as follows:




20




Three
                Month Ended March 31,2008
            
            
            2007Tax
                benefit at statutory rate
            
            
            (35
            )%
            
            (35
            )%Adjustments
                to change in valuation allowance
            
            
            20
            
            
            35Effective
                tax rate
            
            
            15-
            %
            
            -
            %






**Note
      9.**  **Earnings
      Per Share**





The
      Company computes net income per common share in accordance with FASB Statement
      of Financial Accounting Standard 128, Earnings per Share (“Statement 128”).
      Under the provisions of Statement 128, basic net income per common share is
      computed by dividing the net income applicable to common shares by weighted
      average number of common shares outstanding during the period. Diluted net
      income per common share adjusts basic net income per common share for the
      effects of stock options, restricted stock and other potentially dilutive
      financial instruments only in the periods in which such effect is dilutive.





The
      following table sets forth the computation of basic and diluted income (loss)
      per common share:





March
                31, 2008
            
            
            March
                31, 2007NumeratorNet
                income (loss)
            
            $
            463,000
            
            $
            (520,000
            )DenominatorWeighted
                average common shares
            
            
            30,642,823
            
            
            18,705,939Effect
                of dilutive securitiesUnvested
                restrictive shares
            
            
            244,438
            
            
            -Common
                stock
            
            
            316,598
            
            
            -Warrants
            
            
            1,289,485
            
            
            -Total
                dilutive effect of securities
            
            
            1,850,520
            
            
            -Denominator
                of net income (loss) per common shares -diluted
            
            
            32,493,343
            
            
            18,705,939Net
                income (loss) per common share:Basic
            
            $
            0.02
            
            
            (0.03
            )Diluted
            
            $
            0.01
            
            
            (0.03
            )







21





**Note
      10. Segment Reporting**





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





Our
      ticketing services are carried out by our wholly owned subsidiary Tix4Tonight,
      which offers for sale discount and premium tickets. 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 75 Las Vegas shows
      and
      attractions, out of a total of approximately 90 Las Vegas shows and attractions
      running at any one time, and typically offers tickets for more than 60 shows
      on
      any given day at a discount plus a service fee. 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.




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
      turn-key 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
      spaced 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.”




On
      January 2, 2008, the Company 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 are
      independent presenters of live theater and concerts with a history of working
      together. The Company’s intent is to combine 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 under 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 for the foreseeable future as a reflection of the equity and
      marketplace recognition those entities have.





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.




22





**Consolidating
                Statement of Operations**


**Ticketing****Services**
            
            
            **Exhibit**
              **Merchandising**
            
            
            **Live**
              **Entertainment**
            
            
            **Corporate**
              **Expenses**
            
            
            **Eliminations**
            
            
            **Consolidated**
              **and
                Combined****2008**Revenue
            
            $
            2,995,000
            
            $
            3,102,000
            
            $
            17,065,000
            
            $
            -
            
            $
            -
            
            $
            23,162,000Direct
                operating expenses
            
            
            1,529,000
            
            
            1,877,000
            
            
            13,325,000
            
            
            
            
            
            
            
            
            16,731,000Selling,
                general and administrative expenses
            
            
            599,000
            
            
            838,000
            
            
            2,026,000
            
            
            1,373,000
            
            
            -
            
            
            4,836,000Depreciation
                and amortization
            
            
            50,000
            
            
            786,000
            
            
            187,000
            
            
            100,000
            
            
            
            
            
            1,123,000Operating
                income (loss)
            
            $
            817,000
            
            $
            (399,000
            )
            $
            1,527,000
            
            $
            (1,473,000
            )
            $
            -
            
            $
            472,000Total
                assets
            
            $
            2,527,000
            
            $
            47,176,000
            
            $
            13,691,000
            
            $
            2,638,000
            
            $
            -
            
            $
            66,032,000**2007**Revenue
            
            $
            1,747,000
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            1,747,000Direct
                operating expenses
            
            
            714,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            714,000Selling,
                general and administrative expenses
            
            
            435,000
            
            
            
            
            
            
            
            
            1,055,000
            
            
            
            
            
            1,490,000Depreciation
                and amortization
            
            
            44,000
            
            
            
            
            
            
            
            
            20,000
            
            
            
            
            
            64,000Operating
                income (loss)
            
            $
            554,000
            
            $
            -
            
            $
            -
            
            $
            (1,075,000
            )
            $
            -
            
            $
            (521,000
            )Total
                assets
            
            $
            2,685,000
            
            $
            -
            
            $
            -
            
            $
            1,369,000
            
            $
            -
            
            $
            4,054,000





23





**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATIONS:**





*“Tix
      ” (which may be referred to as “we”, “us” or “our”) means Tix Corporation and
      its subsidiaries, or one of our segments or subsidiaries, as the context
      requires. You should read the following discussion of our financial condition
      and results of operations together with the unaudited consolidated financial
      statements and notes to the financial statements included elsewhere in this
      quarterly report.*





Certain
      statements contained in this quarterly report (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 statements of historical fact constitute “forward-looking
      statements” within the meaning of Section 27A of the Securities Act of
      1933, as amended, and Section 21E of the Exchange Act of 1934, as amended,
      notwithstanding 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, potential operating performance improvements, and the effects
      of
      competition, the effects of future legislation or regulations and plans and
      objectives of our management for future operations. We have based our
      forward-looking statements on our management’s beliefs and assumptions based on
      information available to our management at the time the statements are made.
      Use
      of the words “may,” “should,” “continue,” “plan,” “potential,” “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “outlook,” “could,” “project,”
“seek,” “predict” or variations of such words and similar expressions are
      intended to identify forward-looking statements but are not the exclusive means
      of identifying such statements.





Forward-looking
      statements are not guarantees of future performance and are subject to risks
      and
      uncertainties that could cause actual results to differ materially from those
      in
      such statements. Factors that could cause actual results to differ from those
      discussed in the forward-looking statements include, but are not limited to,
      those set forth under Item 1A. — Risk Factors in both our 2007
      Form 10-KSB and this quarterly report, as well as other factors described
      herein or in our annual, quarterly and other reports we file with the SEC
      (collectively, “cautionary statements”). Based upon changing conditions, should
      any one or more of these risks or uncertainties materialize, or should any
      underlying assumptions prove incorrect, actual results may vary materially
      from
      those described in any forward-looking statements. All subsequent written and
      oral forward-looking statements attributable to us or persons acting on our
      behalf are expressly qualified in their entirety by the applicable cautionary
      statements. We do not intend to update these forward-looking statements, except
      as required by applicable law .





**Executive
      Overview**





During
      the first quarter of 2008 we continued to execute our strategy to improve and
      build our operations comprised of Tix4Tonight, Exhibit Merchandising (EM) and
      Tix Productions Inc. (TPI). The highlights for each our segments for the first
      quarter of 2008 were:




**Tix4Tonight**





·
            For
                the three months ended March 31, 2008, the value of the discount
                tickets
                sold increased by $3.4 million or 48% to $10.6 million,





·
            For
                the three months ended March 31, 2008, the number of the discount
                tickets
                sold increased by 72,000 tickets or 48% to 222,000 tickets,




**Exhibit
      Merchandising**





·
            EM
                successfully negotiated a new contract with HILTI Arts & Cultute GmbH
                to operate its exhibit “Egypt’s Sunken Treasures,” in Madrid, Spain. This
                exhibit opened April 15, 2008 and is scheduled to operate through
                September 2008.





·
            EM
                successfully opened its second foreign gift shop for “Tutankhamun and the
                World of the Pharaohs” in Vienna, Austria at the Kunsthistorisches Museum.
                Tutankhamun is scheduled to be at the Kunsthistorisches Museum from
                March
                2008, until September, 2008.





24




**Live
      Entertainment**




·
              Live
                    Entertainment successfully acquired Magic Arts & Entertainment -
                    Florida, Inc. (Magic) and NewSpace Entertainment, Inc. (NewSpace).
                    Both
                    Magic and NewSpace are independent presenters and producers of
                    live
                    theater and concerts with a history of working together. We believe
                    that
                    by combining the operations of the two companies under a single
                    entity, we
                    will be able to better leverage our resources, and gain operating
                    efficiencies.





**Critical
      Accounting Policies and Estimates:**





The
      preparation of our consolidated financial statements is 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 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.





Tix4Dinner
      offers reservations for discounted dinners at various restaurants on the Las
      Vegas strip, with dining at specific times on the same day as the sale.
      Tix4Dinner recognizes as revenue the transaction fees earned from the purchaser
      of 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.





Tix4Golf
      recognizes as revenue the difference between how much it charges its customers
      for tee-times and how much it pays golf courses for tee-times. The revenue
      per
      tee-time, as well as the cost per tee-time, varies, depending on the
      desirability of the golf course and tee-time, weather, time of year and several
      other factors. Revenue per tee-time is significantly higher when tee-times
      are
      guaranteed or pre-bought in large quantities. Tee-times are generally sold
      the
      day before or the day of the tee-time, however, tee-times may be booked in
      advance. Revenue is not recognized until the day of the tee-time. The Company
      does not have any accounts receivable associated with this business, as all
      transactions are paid for at the time of purchase.




25


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.





Exhibit
      Merchandising recognizes retail store sales at the time the customer takes
      possession of the merchandise. All sales are net of discounts and returns and
      exclude sales tax. 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 our websites are included as a component
      of
      net sales. The Company does not have any accounts receivable associated with
      this business, as all transactions are done by cash or credit card.




On
      January 1, 2008 the Company began its live entertainment segment. Revenue from
      the presentation and production of an event is recognized after the performance
      occurs upon settlement of the event; however any profits related to these tours
      is recognized after minimum revenue thresholds, if any have been achieved.
      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:





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 using SFAS No. 123R effective January 1, 2006, for all
      share-based payments granted based on the requirements of SFAS No. 123R for
      all awards granted to employees. The Company accounts for stock option and
      warrant grants issued and vesting to non-employees in accordance with EITF
      No.
      96-18: "Accounting for Equity Instruments that are Issued to Other Than
      Employees for Acquiring, or in Conjunction with Selling, Goods or Services” and
      EITF 00-18 “Accounting Recognition for Certain Transactions involving Equity
      Instruments Granted to Other Than Employees” 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.






26




**Impairment
      of Long-Lived Asset:**





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 measures. 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.





Intangible
      Assets:





The
      Company accounts for intangibles in accordance with Statement of Financial
      Accounting Standards No. 141, “Business Combinations” and Statement of Financial
      Accounting Standards No. 142, “Goodwill and Other Intangible Assets”.
      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 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 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.  There were no indications of impairment based on
      management’s assessment at December 31, 2007 or 2006.





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
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which
      provides enhanced guidance for using fair value to measure assets and
      liabilities. SFAS No. 157 provides a common definition of fair value and
      establishes a framework to make the measurement of fair value in generally
      accepted accounting principles more consistent and comparable. SFAS No. 157
      also
      requires expanded disclosures to provide information about the extent to which
      fair value is used to measure assets and liabilities, the methods and
      assumptions used to measure fair value, and the effect of fair value measures
      on
      earnings. SFAS No. 157 is effective for financial statements issued in fiscal
      years beginning after November 15, 2007 and to interim periods within those
      fiscal years.





In
      February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
      Statement No. 159, “The Fair Value Option for Financial Assets and Financial
      Liabilities * Including an amendment of FASB Statement No. 115” (SFAS 159). SFAS
      159, which becomes effective for the Company on January 1, 2008, permits
      companies to choose to measure many financial instruments and certain other
      items at fair value and report unrealized gains and losses in earnings. Such
      accounting is optional and is generally to be applied instrument by instrument.







In
      December 2007, the FASB issued FASB Statement No. 141 (R), “Business
      Combinations” (FAS 141(R)), which establishes accounting principles and
      disclosure requirements for all transactions in which a company obtains control
      over another business. Statement 141(R) applies prospectively to business
      combinations for which the acquisition date is on or after the beginning of
      the
      first annual reporting period beginning on or after December 15, 2008. Earlier
      adoption is prohibited.




27




In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements, an amendment of ARB No. 51”. SFAS No. 160
      establishes accounting and reporting standards that require that the ownership
      interests in subsidiaries held by parties other than the parent be clearly
      identified, labeled, and presented in the consolidated statement of financial
      position within equity, but separate from the parent’s equity; the amount of
      consolidated net income attributable to the parent and to the noncontrolling
      interest be clearly identified and presented on the face of the consolidated
      statement of income; and changes in a parent’s ownership interest while the
      parent retains its controlling financial interest in its subsidiary be accounted
      for consistently. SFAS No. 160 also requires that any retained noncontrolling
      equity investment in the former subsidiary be initially measured at fair
      value when a subsidiary is deconsolidated. SFAS No. 160 also sets forth the
      disclosure requirements to identify and distinguish between the interests of
      the
      parent and the interests of the noncontrolling owners. SFAS No. 160 applies
      to
      all entities that prepare consolidated financial statements, except
      not-for-profit organizations, but will affect only those entities that have
      an
      outstanding noncontrolling interest in one or more subsidiaries or that
      deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and
      interim periods within those fiscal years, beginning on or after December 15,
      2008. Earlier adoption is prohibited. SFAS No. 160 must be applied prospectively
      as of the beginning of the fiscal year in which it is initially applied, except
      for the presentation and disclosure requirements. The presentation and
      disclosure requirements are applied retrospectively for all periods presented.





The
      Company does not believe the adoption of the above recent pronouncements, with
      the exception of FAS 141(R), will have a material effect on the Company’s
      consolidated results of operations, financial position, or cash flows. FAS
      141(R) introduces significant changes to the accounting for and reporting of
      business combinations, continuing the movement toward greater use of fair values
      in financial reporting and expanded disclosures. FAS 141(R) impacts the annual
      goodwill impairment test associated with acquisitions that occurred prior to
      the
      standard's effective date and acquisitions closing after the effective date.
      Thus, companies such as us that have goodwill from an acquisition that closed
      prior to the standard's effective date will need to understand the provisions
      of
      FAS 141(R). Management is currently evaluating the potential effects of FAS
      141(R) on its currently recorded goodwill, as well as any goodwill that could
      be
      recorded as result of a future acquisition.




28





**Consolidated
      Results of Operations - Three Months Ended March 31, 2008 compared to the Three
      Months Ended March 31, 2007**


**Results
                of Operations:****Consolidated
                Results of Operations**


2008
            
            
            2007
            
            
            2006
            
            
            %
                change
              2008
                v
              2007
            
            
            %
                change
              2007
                v
              2006Revenue
            
            
            23,163,000
            
            
            1,747,000
            
            
            1,036,000
            
            
            1226
            %
            
            69
            %Operating
                Expenses:Direct
                operating expenses
            
            
            16,731,000
            
            
            714,000
            
            
            455,000
            
            
            2243
            %
            
            57
            %Selling,
                general and administrative expenses
            
            
            3,465,000
            
            
            191,000
            
            
            93,000
            
            
            1714
            %
            
            105
            %Depreciation
                and Amortization
            
            
            1,122,000
            
            
            1,299,000
            
            
            564,000
            
            
            -14
            %
            
            130
            %Corporate
                expenses
            
            
            1,373,000
            
            
            64,000
            
            
            38,000
            
            
            2045
            %
            
            68
            %Operating
                income (loss)
            
            
            472,000
            
            
            (521,000
            )
            
            (114,000
            )
            
            xx
            
            
            xxOperating
                Margin
            
            
            2
            %
            
            -30
            %
            
            -11
            %Interest
                expense
            
            
            (6,000
            )
            
            (7,000
            )
            
            (151,000
            )Interest
                income
            
            
            34,000
            
            
            8,000
            
            
            7,000Gain
                on settlement with lender
            
            
            -
            
            
            -
            
            
            -Other
                income (expense) - net
            
            
            44,000
            
            
            -
            
            
            -Income
                from continuing operations
            
            
            545,000
            
            
            (520,000
            )
            
            (258,000
            )Income
                from discontinued operationsNon-cash
                gain from settlement of debts
            
            
            -
            
            
            -
            
            
            -Income
                (loss) before income taxes
            
            
            545,000
            
            
            (520,000
            )
            
            (258,000
            )Income
                tax expense
            
            
            82,000
            
            
            -
            
            
            -Net
                Income (Loss)
            
            
            461,000
            
            
            (520,000
            )
            
            (258,000
            )







29




**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 and golf tee times. Additionally, with the formation of Exhibit
      Merchandising, LLC “EM”, from the assets acquired 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.” Our revenues were $23.2 million for the
      three months ended March 31, 2008 as compared to $1.7 million for the year
      three
      months ended March 31, 2007. Our revenues increased $21.5 million, or 1,265%,
      during the three months ended March 31, 2008 as compared to the same period
      of
      the prior year due to acquisitions. During the first three months of 2008 the
      Company realized $20.6 from operations that it has purchased in the last twelve
      months including AnyEvent, Exhibit Merchandising, Magic Arts & Entertainment
      and NewSpace Entertainment.





More
      detailed explanations of the years ended 2007 and 2006 changes 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 to marketing costs and advertising
      expenses along with other related costs of promoting and producing live
      entertainment. Direct Costs of Revenues were $16.7 million for the three months
      ended March 31, 2008 as compared to $714,000 for the three months ended March
      31, 2007. Our operating expenses increased $16.0 million or 2,241% during the
      three months ended March 31, 2008 as compared to the same period of the prior
      year primarily as a result of a 1,265% increase in revenues. Additionally,
      the
      companies that we acquired have higher direct cost of goods and services than
      our discount ticketing operations, which was our primary source of revenue
      during the three months ended March 31, 2007.





More
      detailed explanations of the three months ended 2008 and 2007 changes are
      included in the applicable segment discussions following.




30




**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 $3.5 million for the three months ended March
      31,
      2008, as compared to $1.3 million for the three months ended March 31, 2007.
      Our
      selling, general and administrative expenses increased $2.2 million or
      169%, during the three months ended March 31, 2008 as compared to the same
      period of the prior year due to increases in selling and administrative expenses
      related to the four acquisitions.





More
      detailed explanations of the three months ended 2008 and 2007 changes are
      included in the applicable segment discussions following.





**Corporate
      expenses**





Corporate
      expenses are expenses that relate to activities at or 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 increased $1.3 million for the year ended March 31, 2008,
      as
      compared to same period of the prior year. The increase in corporate expense
      relates significant increase in revenues and expense that have resulted from
      the
      Company acquisitions. Additionally, the Company has issued options to its
      certain employees, which were valued based upon the Black-Scholes option
      valuation model and are being amortized into expense over the vesting period
      of
      the option. The Company incurred employee compensation expense of approximately
      $414,000 during 2008, for which there was no corresponding expense
      2007





**Depreciation
      and Amortization**





Our
      depreciation and amortization was $1.1 million and $53,000 for the three months
      ended March 31, 2008 and 2007 respectively. The approximate increase of $1.0
      million in depreciation and amortization expense in 2008, primarily reflect
      a
      $1.0 million increase in amortization expense and a $50,000 increase in
      depreciation expense. The increase in amortization expense relates primarily
      to
      the $20.0 million of intangible assets we have recorded related to our
      acquisitions of AnyEvent, Exhibit Merchandising, Magic and NewSpace during
      the
      last twelve months. We currently have $17.5 million of amortizable intangibles
      recorded that are being amortized over the next twelve months to sixty months.





**Other
      Income and (Expense)**





Other
      Income and Expense was immaterial for all periods presented.





**Interest
      Income**





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





31








**Ticketing
                Services:****Our
                Ticketing Services segment operating results were as
                follows:****Segment
                Reporting (T4T, AE)****Three
                Months Ended March 31,**
            
            **%
                Change**
            
            **%
                Change****2008**
            
            **2007**
            
            **2006**
            
            **2008
                vs. 2007**
            
            **2007
                vs. 2006**Revenue
            $
            2,995,000
            $
            1,747,000
            $
            1,036,000
            
            
            71%
            
            
            69%Operating
                Expenses:Direct
                operating expenses
            
            1,529,000
            
            714,000
            
            455,000
            
            
            114%
            
            
            57%Selling,
                general and administrative expenses
            
            599,000
            
            435,000
            
            237,000
            
            
            38%
            
            
            84%Depreciation
                and amortization
            
            50,000
            
            44,000
            
            38,000
            
            
            14%
            
            
            16%Operating
                income (loss)
            $
            817,000
            $
            554,000
            $
            306,000
            
            
            47%
            
            
            81%Operating
                margin
            
            27%
            
            32%
            
            30%


**Three
      months ended March 31, 2008 compared to the Three Months Ended March 31,
      2007**





The
      Ticketing services operations are performed by our Tix4Tonight subsidiary.
      Tix4Tonight has two operating units: Tix4Tonight, our discount ticket seller
      and
      Tix4AnyEvent (AnyEvent), our premium ticketing operation. The Ticketing Service
      segment 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 and golf tee times. Ticketing Services revenues were $3.0 million
      for the three months ended March 31, 2008 as compared to $1.7 million for the
      three months ended March 31, 2007. Our revenues increased $1.3 million, or
      71%,
      during the three months ended March 31, 2008 as compared to the same period
      of
      the prior year. The increase in Ticket Service segment revenues is the result
      of
      three factors. The first factor is AnyEvent’s revenues were completely reflected
      in 2008, as AnyEvent was not acquired until March 2007. During the first three
      months of 2008 AnyEvent generated $429,000 in revenues as compared to $50,000
      during the one month that it we operated it during 2007. This represent an
      increase of $379,000 in revenues in the three month ended March 31, 2008 as
      compared to the same period in 2007. The second factor is Tix4Tonight’s revenues
      increased $819,000 or 47% in 2008 as compared to the same period in 2007. The
      increase reflects a greater demand for discount tickets as the average selling
      price per ticket in 2008 as compared to 2007 was relatively unchanged. The
      average price per discount ticket in 2008 was $47.55 versus an average price
      per
      discount ticket in 2007 of $47.51. Tix4Tonight discount tickets sold increased
      72,000 tickets or 48% to 222,000 discounted show tickets for the three months
      ended March 31, 2008. Commissions and fees were earned on the gross sales value
      of show tickets sold to customers of $10.6 million for the three
      months ended March 31, 2008, as compared to $7.1 million for the three
      months ended March 31, 2007. This increase in revenues in 2008 as compared
      to
      2007 reflects an increased customer demand for discount tickets. Lastly, during
      the three months ended March 31, 2008, revenues from miscellaneous sources
      of
      income including discount golf, and dinner reservations increased by $100,000,
      to $188,000 or 114%.





During
      three months ended March 31, 2007 and 2006 substantially all of our revenues
      were from ticket commissions and fees generated by our discount ticket
      operation. For the three months ended March 31, 2007, our revenues were $1.7
      million as compared to $1.0 million for the three months ended March 31, 2006,
      an increase of $711,000 or 69%. The increase in revenues during the three months
      ended March 31, 2007 reflects both an increase in the average price per discount
      ticket as well as stronger demand for discount tickets. The average ticket
      price
      increased to $47.51 in 2007, as compared to $35.12 in 2006. Commissions and
      fees
      were earned on the gross sales value of show tickets sold to customers of $7.1
      million for the three months ended March 31, 2007, as compared to $4.1
      million for the three months ended March 31, 2006, an increase of $3.0
      million or 73%. The Company sold 150,000 tickets in 2007, as compared to
      117,000 tickets in 2006, an increase of 33,000 tickets or 28%. Revenues from
      dinner reservations and golf reservations were not material.




32




**Direct
      operating expenses**





Tix4Tonight
      direct operating expenses include payroll and related costs, rents, and cost
      of
      tickets sold. Direct Costs of expenses were $1.5 million for the three months
      ended March 31, 2008 as compared to $714,000 for the three months ended December
      31, 2007, which represented an increase in direct operating expenses $815,000
      or
      114%. Direct operating expenses increased to 51% of revenues in 2008, as
      compared to 41% of revenues in 2007. The higher operating expenses were
      reflective of the higher revenues from our existing discount ticket operations,
      higher cost per ticket and lower margins related to our premiums ticket
      business, AnyEvent, and the opening of our fifth ticket booth location during
      the fourth quarter 2007 that is not reflected in the first quarter of
      2007.





During
      the first three months of 2007 and 2006 substantially all of our direct
      operating expenses were related to our discount tickets. Direct operating
      expenses were $714,000 for the three months ended March 31, 2007, as compared
      to
      $455,000 for the three months ended March 31, 2006, an increase of $259,000
      or
      57%. Direct operating expenses decreased to 41% of revenues in 2007; as compared
      to 44% of revenues in 2006 is the result of a slower rate of increase in direct
      costs of revenues as compared to the growth in revenues in 2007 as compared
      to
      2006. Direct costs of revenues increased on an absolute basis in 2007 as
      compared to 2006 as a result of an increase in contingent rent expense resulting
      from achieving a significant revenue increase from ticket sales, and as a result
      of an increase in personnel costs resulting from the hiring of additional
      employees.





**Selling,
      Marketing and Administrative Expenses**





Tix4Tonight
      selling, marketing and administrative expenses include advertising and
      promotional costs related to its business activities, as well as the segment
      cost of management. Tix4Tonight’s selling; marketing and administrative expenses
      were $599,000 for the three months ended March 31, 2008, as compared to $435,000
      for the three months ended March 31, 2007. Our selling, marketing and general
      and administrative expenses increased $164,000 or 38%, during the three months
      ended March 31, 2008 and is associated with an overall increase in revenues
      and our acquisition of John’s Tickets (AnyEvent). Selling, marketing
      and administrative expenses were 20% percent of revenues during the three months
      ended March 31, 2008 as compared to 25% during the first three months of 2007.
      The 20% decrease in selling, marketing and general administrative expenses
      is
      reflective of the relatively fixed cost of the administrative expense portion
      of
      the Ticketing Services operations.




During
      the three months ended March 31, 2007 and 2006 substantially all of our segment
      selling, general and administrative expenses were related to the sales of
      discount tickets. Our selling, general and administrative expenses were $435,000
      for the three months ended March 31, 2007, as compared to $237,000 for the
      three
      months ended March 31, 2006, an increase of $198,000 or 84%, which is associated
      with an overall increase in revenues. Selling, marketing and administrative
      expenses increased to 25% percent of revenues for the three months ended March
      31, 2007, as compared to 23% of revenues for the three months ended December
      31,
      2006.





**Depreciation
      and amortization**





Depreciation
      and amortization expense incurred during the three months ended March 31, 2008
      relates was $50,000 and we expect to incur a similar level of depreciation
      and
      amortization for the foreseeable future.


33







**Exhibit
                Merchandising:****Our
                Exhibit Merchandising segment operating results were as
                follows:****Segment
                Reporting - Exhibit Merchandising**


**Three
                Months Ended 31,**
            
            **%
                Change**
            
            **%
                Change****2008**
            **2007**
            **2006**
            
            **2008 vs. 2007**
            
            **2007 vs. 2006**


**Three
                Months Ended 31,**
            
            
            **%
                Change**
            
            
            **%
                Change****2008**
            
            
            **2007**
            
            
            **2006**
            
            
            **2008
                vs. 2007**
            
            
            **2007
                vs. 2006**Revenue
            
            $
            3,102,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/AOperating
                Expenses:Direct
                operating expenses
            
            
            1,877,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/ASelling,
                general and administrative expenses
            
            
            838,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/ADepreciation
                and amortization
            
            
            786,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/AOperating
                income (loss)
            
            $
            (399,000
            )
            
            -
            
            
            -
            
            
            N/A
            
            
            N/AOperating
                margin
            
            
            -13
            %
            
            N/A
            
            
            N/A








Exhibit
      Merchandising was acquired in August 2007; therefore there are no comparable
      balances: 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. Exhibitors receive a simple royalty
      payment 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 backend.




**Revenues.**




EM
      provides retail specialty stores for touring museum exhibitions and touring
      theatrical productions. EM provides a complete turn-key retail store with
      commercially-available and extensive custom-branded product for sale. It
      operates the stores in space rented in conjunction with the exhibit. During
      the
      three months ended March 31, 2008, EM earned $3.1 million in revenues from
      the management of retail outlets associated with the sale of merchandise related
      to touring exhibits, primarily derived from “Tutankhamun and The Golden Age of
      the Pharaohs.” EM is subject to revenue fluctuations as a result of the exhibits
      that it represents moving from one location to another. The move of 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” continued at the “02” in London, England and
      opened in Vienna, Austria.




**Direct
      operating expenses**





EM’s
      operating expenses include payroll and related costs, rents, and cost of goods
      sold. Direct operating expenses were $1.9 million or 61% of revenues for the
      three months ended March 31, 2008, which is consistent with the 64% of revenues
      that was experienced during the five months that we operated EM during
      2007.




34




Statement
      of Financial Accounting Standard No. 141 “Business Combinations” (SFAS 141)
      requires an acquiring Company to record any inventory acquired at its fair
      market value adjusted for certain related period expenses, such as warehousing
      and selling costs. At the time we acquired EM we increased the value of the
      inventory on hand by $485,000 using a methodology that we believe to be
      consistent with SFAS 141. Therefore, we will realize lower margins as this
      inventory is sold, than we would on inventory acquired from vendors. EM’s cost
      of goods sold during the three months ended March 31, 2008 reflects a charge
      of
      approximately $111,000 related to this increase in the inventory on hand at
      the
      time we acquired EM. At March 31, 2008, approximately $172,000 of unamortized
      SFAS 141 fair market adjustment is included in the inventory value reflected
      in
      the financial statements.





**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 were
      $905,000. EM’s selling, general and administrative expenses were 21% of
      revenues.





**Depreciation
      and amortization**





Depreciation
      and amortization expense incurred during the first three months was $786,000
      relates primarily to amortization of the intangible assets that were created
      as
      a result of EM being acquired in August 2007. During the first three months
      of
      2008 amortization and depreciation expense was $730,000 and $56,000
      respectively. We expect these levels of depreciation and amortization to
      continue through 2010.


35







**Live
                Entertainment:****Our
                Live Entertainment segment operating results were as
                follows:****Segment
                Reporting-Tix Productions****Three
                Months Ended 31,**
            
            **%
                Change**
            
            **%
                Change****2008**
            
            **2007**
            
            **2006**
            
            **2008 vs. 2007**
            
            **2007 vs. 2006**Revenue
            
            $
            17,065,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/AOperating
                Expenses:Direct
                operating expenses
            
            
            13,325,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/ASelling,
                general and administrative expenses
            
            
            2,028,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/ADepreciation
                and amortization
            
            
            187,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/AOperating
                income (loss)
            
            $
            1,525,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/AOperating
                margin
            
            
            9%
            
            
            N/A
            
            
            N/A








Tix
      Productions, Inc., the Company’s Live Entertainment segment, does business under
      the names Magic Arts & Entertainment (Magic) and NewSpace Entertainment
      (NewSpace). We acquired Magic Arts & Entertainment, LLC (Magic) and NewSpace
      Entertainment (NewSpace) operations effective January 1, 2008. Both Magic and
      NewSpace are independent presenters and producers of live theater and concerts
      with a history of working together. We believe that by combining the operations
      of the two companies under a single entity, we will be able to better leverage
      our resources, and gain operating efficiencies.




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 eight 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 three months ended March 31, 2008, revenues from our Live Entertainment
      operations were $17.1 million. 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 EITF abstract 99-19 “Reporting
      Revenues Gross as Principal Versus Net as an Agent.” Revenues from our Live
      Entertainment operations are seasonal with the first and fourth quarters being
      traditionally the strongest.




36





**Direct
      Operating Expenses**





During
      the three months ended March 31, 2008 direct operating expense was $13.3
      million. 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
      large back-end 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
      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
      which were $203,000. Live Entertainment’s selling, general and administrative
      expenses were 12% of revenues.





**Depreciation
      and amortization**





Depreciation
      and amortization expense incurred during the three months ended March 31, 2008
      relates was $187,000 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 the through
      2009.





**Liquidity
      and Capital Resources:**





At
      March 31, 2008, we had cash and cash equivalents of $6.6 million and
      total assets of $66.0 million compared to $7.4 million and
      $55.2 million, respectively, at December 31, 2007. Our working capital
      totaled $7.5million at March 31, 2008, compared to $8.9 million at December
      31,
      2007. We had no debt for the three months ending March 31, 2008 and the
      year-ended December 31, 2007.





Our
      working capital requirements and capital for our 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. We may need to incur debt or issue equity to
      make
      other strategic acquisitions. 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 and for Live Entertainment at the time of the settlement
      of revenues and expenses of the show, which is generally on the last date of
      the
      show. In certain instances, but not all, the sale of premium tickets occur
      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
      cash
      fluctuates 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, second and fourth quarters. 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 believe that we have
      sufficient financial flexibility to fund these fluctuations and to access
      capital markets on satisfactory terms and in adequate amounts, although there
      can be no assurance that this will be the case. We expect cash flows from
      operations and other financing alternatives, to satisfy working capital, and
      capital expenditures for at least the succeeding year.




37




**Operating
      Activities:**





Cash
      flows from operations were $2.3 million for the three months ended March 31,
      20078, compared to cash used in operations of $440,000 for the three months
      ended March 31, 2007. The $2.3 million increase in cash flows provided from
      operations were the result of a net operating profit in 2008 of $460,000, as
      compared to an operating loss in 2007 of $520,000 and adjustments for non-cash
      items and changes in accounts reflecting non-operating activities. Significant
      items adjusting net profit in 2008 were a $3.7 million increase in accounts
      receivable, which was off-set by a $3.0 million increase in accounts payable
      and
      $1.1 million of amortization and depreciation expense. During 2007 items
      adjusting the net loss included a $1.0 million used related for the purchase
      of
      premium ticket related to our acquisition of AnyEvent, which was offset by
      increases of $339,000 in deferred revenues, $421,000 in accounts payable and
      $389,000 in expense related to the issuance of options to employees and
      consultants. The remaining amounts relate to operating accounts that are
      reflective of the level and timing of activity that occurred during the period,
      e.g., accrued liabilities.





**Cash
      Flows from Investing Activities:**





Acquisitions





During
      the three months ended March 31, 2008 and 2007 we used $3.3 million and $489,000
      related to investing activities. Effective January 1, 2008, we acquired through
      merger Magic Arts & Entertainment - Florida, Inc. (Magic) and the
      acquisition NewSpace Entertainment, Inc. (NewSpace). Both Magic and NewSpace
      are
      independent presenters of live theater and concerts with a history of working
      together. As consideration for the acquisition of Magic Tix paid $2.1 million
      and issued 476,190 shares of stock that had 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 Tix paid $1.4 million and issued
      571,428 shares of stock that had market value of $2.7 million, which
      approximated the fair market value of the shares at the time of issuance. During
      the three months ended March 31, 2007 the Company paid $396,000 for AnyEvent
      and
      the related inventory.





Other





During
      the three months ended March 31, 2008 and 2007, we purchased fixed assets with
      a
      value of $130,000 and $93,000 respectively.





**Cash
      Flows from Financing Activities:**





During
      the three months ended March 31, 2008 and 2007 financing activities provided
      $218,000 and $135,000. During 2008 and 2007cash generated from financing
      activities was the result of the receipt of the proceeds from the exercise
      of
      options and warrants and was offset by a minor amount of payments related to
      capital leases and a note payable.





**Summary**





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 will be cash
      flows
      from operations, while our long-term sources of funds will be from operations
      and debt or equity financing. We have sufficient cash on hand and are generating
      sufficient cash from operations to meet our current operating needs.


38





**Principal
      Commitments:**




Lease
      Commitments:





The
      Company leases office space for its corporate headquarters in Studio City,
      California. Additionally, the Company’s wholly-owned subsidiaries, Tix4Tonight,
      LLC, Tix Productions, LLC and Exhibit Merchandising, lease space. Tix4Tonight
      leases its five ticket facilities and its administrative offices in Las Vegas,
      Nevada, for various periods ranging from one year to five years. Tix Production,
      LLC leases office space in Salt Lake City, Utah and Aurora, Ohio. Exhibit
      Merchandising leases warehouse and office space in Streetsboro,
      Ohio.




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.





The
      aggregate minimum future rental payments under non-cancelable operating leases
      for facilities in operation at March 31, 2008, excluding operating expenses,
      annual rent escalation provisions, and contingent rental payments based on
      achieving certain pre-determined sales levels, are as follows:




Payments
                due by Fiscal Years Ending December 31,Total
            
            2008
            
            2009
            
            2010
            
            2011
            
            2012Employment
                agreement
            
            $
            3,630,000
            
            $
            1,424,000
            
            $
            1,273,000
            
            $
            875,000
            
            $
            58,000
            
            
            -Capital
                lease obligations
            
            
            171,000
            
            
            47,000
            
            
            58,000
            
            
            61,000
            
            
            3,000
            
            
            2,000Operating
                lease obligations
            
            
            7,366,000
            
            
            1,696,000
            
            
            2,092,000
            
            
            1,609,000
            
            
            1,136,000
            
            
            833,000Total
                contractual cash obligations
            
            $
            11,167,000
            
            $
            3,167,000
            
            $
            3,423,000
            
            $
            2,545,000
            
            $
            1,197,000
            
            $
            835,000





Employment
      Agreement with President and Chief Executive Officer:





The
      Company has employment agreements with several of its key officers and employees
      that are for varying periods of one to three years.





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 75% 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 100% of the first 3% withheld and 50% for the next 2% withheld. The Company
      may make additional matching contributions as determined and approved by the
      Board of Directors. Total 401(k) retirement plan expense amounted to $11,000
      and
      $3,000 for the three months ended March 31, 2008 and 2007,
      respectively.




ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK




Not
      applicable.




**ITEM
      4. CONTROLS AND PROCEDURES**





(a)
      Evaluation of Disclosure Controls and Procedures




39




Disclosure
      controls and procedures are designed to ensure that information required to
      be
      disclosed in the reports filed or submitted by the Company under the Securities
      Exchange Act of 1934 is recorded, processed, summarized and reported, within
      the
      time periods specified in the rules and forms of the Securities and Exchange
      Commission. Disclosure controls and procedures include, without limitation,
      controls and procedures designed to ensure that information required to be
      disclosed in the reports filed under the Securities Exchange Act of 1934 is
      accumulated and communicated to the Company’s management, including its
      principal executive and financial officers, as appropriate, to allow timely
      decisions regarding required disclosure.





The
      Company is the process of carrying out an evaluation, under the supervision
      and
      with the participation of the Company's management, including its principal
      executive and financial officer, of the effectiveness of the Company's
      disclosure controls and procedures as of the end of the period covered by this
      report as a result of its acquisitions of Magic and NewSpace. Based upon and
      as
      of the date of that evaluation, the Company's principal executive and financial
      officer concluded that the Company's disclosure controls and procedures are
      effective to ensure that information required to be disclosed in the reports
      the
      Company files and submits under the Securities Exchange Act of 1934 is recorded,
      processed, summarized and reported within the time periods specified in the
      Securities and Exchange Commission's rules and forms.





(b)
      Changes in Internal Control Over Financial Reporting





There
      were no changes in the Company's internal control over financial reporting
      or in
      other factors that could have materially affected or is reasonably likely to
      materially affect the Company’s internal controls over financial
      reporting.




PART
      II.
      OTHER INFORMATION





ITEM
      1.
      LEGAL PROCEEDINGS





The
      Company is currently not a party to any pending or threatened legal
      proceedings.





ITEM
      2.
      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




On
      February 29, 2008 we completed our merger acquisition of Magic Arts &
Entertainment -Florida, Inc., a privately held Florida corporation (“Magic”).
      Pursuant to the Merger Agreement and Plan of Merger, we paid to the two
      stockholders of Magic $2.0 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.
      Additionally, we will be obliged to issue to the former Magic stockholders
      a
      total of up to 380,952 additional shares of our common stock if certain EBITDA
      milestones are achieved during the next thirty-six months. These milestones
      are
      based upon the results of Tix Productions, Inc. (“TPI”), a wholly owned
      subsidiary of the Company that will focus on providing live entertainment.




On
      March
      11, 2008 we completed our merger acquisition (the “Merger”) of NewSpace
      Entertainment, Inc., a privately held Utah corporation (“NewSpace”). Pursuant to
      the Merger, we paid to the three stockholders of NewSpace $1 million in cash
      and
      issued to them a total of 571,428 restricted shares of our common stock with
      a
      market value of $2.7 million.  All securities were exempt from registration
      pursuant to section 4(a) of the Securities Act of 1934 as amended and Regulation
      D.  The certificates evidencing the securities bear a restrictive
      legend.





ITEM
      3.
      DEFAULTS UPON SENIOR SECURITIES





Not
      applicable.





ITEM
      4.
      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





Not
      applicable.





ITEM
      5.
      OTHER INFORMATION




40




Not
      applicable.





ITEM
      6.
      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
  Pursuant
        to the requirements of Section 13 or 15(d) of the Securities Exchange Act
        of
        1934, the registrant has duly caused this report to be signed on its behalf
        by
        the undersigned, thereunto duly authorized.
 TIX
                  CORPORATION
                (Registrant)Date:
                  May 20, 2008
              By:
              /s/Mitch
                  FrancisMitch
                FrancisChief
                Executive Officer
 Date:
                  May 20, 2008
              By:
              /s/
                Matthew
                NatalizioMatthew
                NatalizioChief
                  Financial Officer
                (Duly
                    Authorized Officer and
                  Principal
                    Financial Officer)
     INDEX
        TO
        EXHIBITS
 
 31.1
                
                Officer’s
                    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
                    of 2002
                    (4)31.2
                
                Officer’s
                    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
                    of 2002
                    (4)32.1
                
                Officer’s
                    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
                    of 2002
                    (4)






41