UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-KSB




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





For
      the
      Fiscal Year Ended December 31, 2007





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


(Name
      of
      small business issuer in its charter)





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





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


(Address
      of principal executive offices, including zip code)





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





Securities
      registered pursuant to Section 12(b) of the Act: None




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





Common
      Stock, $0.08 Par Value


(Title
      of
      Class)


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





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the preceding 12 months (or for such shorter
      period that the registrant was required to file such reports), and (2) has
      been
      subject to such filing requirements for the past 90 days. Yes xNo o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B in this form, and no disclosure will be contained, to the best
      of
      registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB. o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes oNo x




The
      issuer’s revenues for the fiscal year ended December 31, 2007 were
      $18,567,000.





The
      aggregate market value of the issuer’s common stock held by non-affiliates of
      the issuer as of March 14, 2008, based on the closing market price of $4.60
      per
      share, was $78,251,736.





As
      of
      March 14, 2008, the issuer had 31,375,474 shares of common stock issued and
      outstanding.







Transitional
      Small Business Disclosure Format: Yes oNo x




Documents
      incorporated by reference: None.







Special
      Note Regarding Forward-Looking Statements:





Certain
      statements contained in this Form 10-KSB (or otherwise made by us or on our
      behalf from time to time in other reports, filings with the Securities and
      Exchange Commission, news releases conferences, internet postings or otherwise)
      that are not statement of historical facts constitute "forward-looking"
      statements within the meaning of Section 27A of the Securities Act of 1933,
      as
      amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
      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 Annual Report on Form
      10-KSB for the fiscal year ended December 31, 2007 involve known and unknown
      risks, uncertainties and other factors that could cause actual results,
      performance or achievements of the Company to differ materially from those
      expressed in or implied by the forward-looking statements contained
      herein.





Each
      forward-looking statement should be read in context with, and with an
      understanding of, the various disclosures concerning the Company and its
      business made elsewhere in this Annual Report on Form 10-KSB for the fiscal
      year
      ended December 31, 2007, as well as other public reports filed with the United
      States Securities and Exchange Commission. Investors should not place undue
      reliance on any forward-looking statement as a prediction of actual results
      or
      developments. Except as required by applicable law or regulation, the Company
      undertakes no obligation to update or revise any forward-looking statement
      contained in this Annual Report on Form 10-KSB for the fiscal year ended
      December 31, 2007, whether as a result of new information, future events or
      otherwise.




2





TABLE
      OF
      CONTENTS





PagePART
                IITEM
                1.
            DESCRIPTION
                OF BUSINESS
            4ITEM
                2.
            DESCRIPTION
                OF PROPERTY
            13ITEM
                3.
            LEGAL
                PROCEEDINGS
            14ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            14PART
                IIITEM
                5.
            MARKET
                FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                ISSUER
                PURCHASES OF EQUITY SECURITIES
            15ITEM
                6.
            MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONSITEM
                7.
            FINANCIAL
                STATEMENTSITEM
                8.
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                DISCLOSUREITEM
                8A.
            CONTROLS
                AND PROCEDURES
            38ITEM
                8B.
            OTHER
                INFORMATION
            39PART
                IIIITEM
                9.
            DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                SECTION
                16(a) OF THE EXCHANGE ACT
            39ITEM
                10.
            EXECUTIVE
                COMPENSATION
            42ITEM
                11.
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT
            50ITEM
                12.
            CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS
            52ITEM
                13.
            EXHIBITS
            52ITEM
                14.
            PRINCIPAL
                ACCOUNTANT FEES AND SERVICES
            52SIGNATURES
            
            53


3





PART
      I.





**ITEM
      1. DESCRIPTION OF BUSINESS**





Tix
      Corporation (the “Company”) was incorporated in Delaware in April 1993 under the
      name Cinema Ride, Inc. We changed our name from Cinema Ride, Inc. to Tix
      Corporation effective March 3, 2005.





Our
      principal executive offices are located at 12001 Ventura Place, Suite 340,
      Studio City, California 91604. Our principal website is www.tixcorp.com .
      Tix
      Corporation is trading under the symbol TIXC.ob.





**Our
      Business Strategy**





Tix
      Corporation is an integrated entertainment company focusing on ticketing
      services, event merchandising and the production and promotion of live
      entertainment. We operate three complimentary business units; Tix4Tonight,
      Exhibit Merchandising (EM) and our newly formed live entertainment subsidiary
      Tix Productions Inc. (TPI). Our broad strategic goals are to be the last minute
      leading discount ticket operation in the US, a leading exhibition and event
      merchandising company and a major presenter and producer of live entertainment
      in the US and Canada. We are pursuing these strategic goals through both
      internal and external efforts. Internally we are looking at opportunities
      to increase revenues and to enhance profitability through both market
      expansion and cost savings and streamlined operating processes. Externally
      we
      are looking for accretive growth opportunities through the acquisition of
      complementary strategic businesses and new market opportunities. We have begun,
      and will continue, to execute on these strategies through pursuing the
      objectives listed below:





·
            *Improve
                the profitability of our existing businesses*.


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


o
            Tix4Tonight
                is expanding our market reach through development of new marketing
                channels including a national branded internet discount ticket portal
                that
                will be calledWWW.HALFPRICETICKETS.COM;


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


o
            Event
                Merchandising is increasing revenues by generating new projects through
                internal opportunities via Tix Productions and externally through
                opportunities created by their successful roster of our on-going
                events
                e.g. our King Tutankhamun exhibit stores which are currently in London
                and
                Vienna


o
            Tix
                Productions is expanding its live entertainment offerings through
                several new national presenting opportunities with a number of major
                show
                producers, and exploitation of internally produced
                shows.




·
            *Focus
                on acquiring and developing intellectual property.*We
                are always seeking to expand the opportunities inherent in owning
                the
                creative content of live entertainment productions. Tix Productions
                is
                aggressively pursuing producing opportunities which can provide
                opportunities across our complimentary businesses of producing, ticket
                distribution and merchandise distribution. When we are the owners
                of a
                production it makes it much easier to assure that we have complementary
                opportunities to present those shows in our markets, sell the merchandise
                and handle discount and premium ticketing
                opportunities.





·
            *Extend
                our network of producers, promoters and venue managers.*Recognizing the value inherent in strong relationships, Tix is pursuing
                promoting and producing opportunities with a group of leading producers
                and promoters of live entertainment and with leading venues in major
                markets in which we regularly work. The multiple potential streams
                of
                income that we can provide a producer allows novel partnerships and
                deals
                to be reached that increase opportunities for future partnerships
                with
                producers and venues.


4




·
            *Further
                develop our ticketing and online services.*Tix4Tonight is often recognized as the leader in the field of last
                minute
                discount ticket sales. We are developing a nationwide internet
                discount ticketing site, HALFPRICETICKETS.COM. We also anticipate
                operating brick and mortar facilities in certain larger metropolitan
                areas.





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





**Our
      History**





Prior
      to
      December 31, 2003, we were in an unrelated business. From January, 2004
      until March 2007, our principal business activity was the sale of tickets for
      Las Vegas shows at a discount to the original box office price, on the day
      of
      the performance, through its wholly-owned subsidiary, Tix4Tonight, LLC
      (Tix4Tonight). In March 2007, we acquired the assets of John’s Tickets, LLC,
      which was a premium ticket reseller of live theatre, concerts and sporting
      events.  We, the Company, in August, 2008, acquired the assets of Exhibit
      Merchandising, LLC (Ohio). The assets of Exhibit Merchandising, LLC (Ohio)
      were
      assigned to Exhibit Merchandising, LLC (Nevada) (EM) which owns and operates
      complete turn-key retail stores that are leased in conjunction with the exhibits
      that they are supporting, stocked with commercially-available and extensive
      custom-branded products for sale in addition to professional management that
      complements the exhibition or theatrical production it represents. The major
      exhibit currently operated by EM is “Tutankhamun and The Golden Age of the
      Pharaohs.” EM has agreements to operate stores for three new exhibitions in
      2008. In December 2007, the Company announced that it had entered into letters
      of intents to acquire two live theatre production/promotion companies, Magic
      Arts & Entertainment, LLC (Magic) and NewSpace Entertainment (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 and it is our intent 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
      two entities we can better leverage resources, gain operating efficiencies,
      and more fully utilize the combined network.





**Our
      Business**





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. Information related to these operating segments is
      included in Note 14 Segment Data in the Notes to Consolidated Financial
      Statements in Item 8.





**Operating
      Segments**





**Ticketing
      Services**




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.


5




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


1.
            Mid-South
                Strip at the Hawaiian Marketplace Shopping Center (which commenced
                operations in November 2005 and replaced the location next to the
                Harley-Davidson Cafe at Harmon);


2.
            Mid-North
                Strip at the Fashion Show Mall Strip entrance in front of Neiman-Marcus
                (which commenced operations in February
                2005);


3.
            North
                Strip, just south of the Riviera Hotel;


4.
            South
                Strip at the Showcase Mall which is on the Las Vegas Strip, in front
                of
                the MGM Grand Hotel located just behind the world famous giant glass
                Coke
                bottle, ( which commenced operations in November 2007)
                and;


5.
            Downtown
                Las Vegas facility at the Four Queens Hotel fronting onto the Fremont
                Street Experience (which commenced operations in December 2005).





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





Effective
      March 14, 2007, we acquired substantially all the assets of John’s Tickets, LLC,
      an Ohio limited liability company dba Tix4AnyEvent (“AnyEvent”).  AnyEvent
      is a national event ticket broker that sells premium tickets for sporting
      events, concerts, tours and theatre. AnyEvent operations are located in the
      administrative offices of Tix4Tonight in Las Vegas, Nevada.





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





In
      December 2006, we introduced Tix4Golf discount golf reservation business through
      the acquisition of Stand-By Golf Las Vegas. Stand-By Golf Las Vegas has operated
      in the Las Vegas area for approximately ten years, offering tee-time bookings
      to
      approximately 30 area golf courses usually at discounted prices. We offer our
      discount golf offerings at our five Las Vegas ticketing facilities, online
      and
      at our Tix4Tonight’s leased administrative office in Las Vegas via its telephone
      center.





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





**Exhibit
      and Event Merchandising**




We
      provide exhibit and event merchandising through our wholly owned subsidiary
      Exhibit Merchandising, LLC Nevada (EM). EM was formed from the assets acquired
      from Exhibit Merchandising, LLC (Ohio) which were 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. We operate the stores in
      spaces rented in conjunction with the exhibit. To date revenues from the
      management of retail outlets associated with the sale of merchandise related
      to
      touring exhibits, have been primarily derived from “Tutankhamun and The Golden
      Age of the Pharaohs.”




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




6




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.




**Live
      Entertainment**




In
      December 2007, we announced that we had entered into letters of intent to
      acquire two live theatrical and concert production companies; Magic Arts &
Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace). As
      part
      of the letters of intent the managements’ of Magic and NewSpace 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. It is our intent 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.




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 marketing tools. In addition, we invest in
      shows or productions in advance of their initial tour to obtain favorable
      touring and distribution rights.




Net
      revenues from live entertainment are a function of the 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.  Expenses that would be characterized as
      Cost of Goods Sold include the guarantees, profit sharing and royalties paid
      directly to the touring productions, direct expenses of the theater which
      include staffing, rent and box office charges, marketing costs and production
      costs which include equipment rentals, stagehands and the cost of our production
      and settlement manager to attend the production. Live Entertainment productions
      typically have 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.




7






**Revenue
      Concentrations:**





During
      the years ended December 31, 2007 and 2006, there were no showrooms or other
      ticket sources which accounted for 10% or more of ticketing services revenues.
      During the year ended December 31, 2005, one hotel showroom and one other ticket
      source accounted for 14.0% and 11.6% of revenues, respectively.




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




**Competition:**





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





**Ticketing
      Services**





Tix4Tonight
      sells unsold tickets on the same day of the performance, generally at 20% to
      50%
      off the box office price. Producers provide such tickets to the Company both
      on
      an exclusive and non-exclusive basis. Therefore, new ticket brokers can enter
      into competition with the Company to offer the same or similar
      ticketing services to non-exclusive shows and customers. Tix4Tonight
      currently has two competitors in the Las Vegas market and the possibility exists
      for other competitors to compete both there and in other markets targeted by
      the
      Company. Other competitors may possess longer operating histories, larger
      customer bases, longer relationships with producers, and significantly greater
      financial, technical, marketing, and public relations resources than the
      Company. Accordingly, we may not be able to compete successfully and competitive
      pressures may adversely affect its business, results of operations and financial
      condition.





**Exhibit
      and Event Merchandising**





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




**Live
      Entertainment**





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





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


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


·
            The
                scope and effectiveness of our expertise of
                marketing.





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




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


8





Government
      Regulations





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




Intellectual
      Property:





We
      create and own intellectual property. It is our practice to protect our
      trademarks, brands, copyrights, patents and other original and acquired works,
      ancillary goods and services. Our trademarks include, among others,
“Tix4Tonight”, “Tix4Dinners”, “Halfpricetickets.com” and “Halfpricetickets.net”.
      Additionally, through acquisition of Magic Arts and Entertainment we acquired
      the “Broadway” theatrical rights to “ *101
      Dalmatians.”* We
      believe that our trademarks and other proprietary rights have significant value
      and are important to our brand-building efforts and the marketing of our
      services. We cannot predict however whether steps taken by us to protect our
      proprietary rights will be adequate to prevent misappropriation of these
      rights.





Insurance:





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





Employees:





As
      of
      February 29, 2008, we had eight full-time employees at our corporate offices;
      59
      employees at our Las Vegas operation and 17 employees at Exhibit Merchandising,
      of which three were in London, England and one was in Vienna, Austria. Employees
      at the Las Vegas operation consist of both full-time and part-time employees.
      Our employees are not represented by any unions. We believe that our relations
      with our employees are satisfactory.





**Item
      1A. RISK FACTORS**





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




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





Our
      operating results have been adversely affected by among, other things, increased
      stock compensation expense related to obtaining access to the distribution
      rights of tickets to sporting, theatre and concert events. We incurred net
      losses of approximately $16.3 million and $1.0 million in 2007 and 2005
      respectively and earned $39,000 in 2006. We may face reduced demand of our
      entertainment offerings and other factors that could adversely affect our
      results of operations in the future. We cannot predict whether we will achieve
      profitability in future periods.





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





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


9




OUR
      STOCK
      IS QUOTED ON THE OVER-THE-COUNTER BULLETIN BOARD AND COULD BE SUBJECT TO EXTREME
      VOLATILITY





Our
      common stock is currently quoted under the symbol "TIXC" on the Over-the-Counter
      Bulletin Board, which is often characterized by low trading volume. A large
      volume of stock being sold into the market at any one time could cause the
      stock
      to rapidly decline in price.




THERE
      IS
      A LIMITED PUBLIC MARKET FOR OUR COMMON STOCK AND THE COMPANY’S STOCKHOLDERS MAY
      BE UNABLE TO LIQUIDATE THEIR SHARES





Our
      common stock is listed on the Over-the-Counter Bulletin Board, and there is
      a
      limited volume of sales, thus providing limited liquidity into the market for
      the Company’s shares. As a result of the foregoing, stockholders may be unable
      to liquidate their shares.





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





A
      decline
      in attendance at or reduction in the number of live entertainment events may
      have an adverse effect on our revenue and operating income. In addition, during
      the most recent economic slowdown in the United States, many consumers reduced
      their discretionary spending. The impact of slowdowns on our businesses is
      difficult to predict, but they may result in reductions in ticket sales and
      our
      ability to generate revenue. The risks associated with our businesses become
      more acute in periods of a slowing economy or recession, which may be
      accompanied by a decrease in attendance at events that we are involved in the
      ticket sales, merchandising, or production and promotion.





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





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





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





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




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


10




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


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


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


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


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


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





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




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





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





THE
      COMMON STOCK IS DEEMED TO BE A "PENNY STOCK", WHICH MAY MAKE IT MORE DIFFICULT
      FOR INVESTORS TO SELL THEIR SHARES DUE TO SUITABILITY REQUIREMENTS





Since
      our
      common stock is not presently listed on the Nasdaq Stock Market, if the trading
      price of the common stock remains below $5.00 per share, trading in the common
      stock will be subject to the requirements of certain rules promulgated under
      the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”), which require
      additional disclosure by broker-dealers in connection with any trades involving
      a stock defined as a penny stock (generally, any non-Nasdaq equity security
      that
      has a market price of less than $4.00 per share, subject to certain exceptions).
      Such rules require the delivery, prior to any penny stock transaction, of a
      disclosure schedule explaining the penny stock market and the risks associated
      therewith and impose various sales practice requirements on broker-dealers
      who
      sell penny stocks to persons other than established customers and accredited
      investors (generally defined as an investor with a net worth in excess of
      $1,000,000 or annual income exceeding $200,000 individually or $300,000 together
      with a spouse). For these types of transactions, the broker-dealer must make
      a
      special suitability determination for the purchaser and have received the
      purchaser’s written consent to the transaction prior to the sale. The
      broker-dealer also must disclose the commissions payable to the broker-dealer,
      current bid and offer quotations for the penny stock and, if the broker-dealer
      is the sole market maker, the broker-dealer must disclose this fact and the
      broker-dealer’s presumed control over the market. Such information must be
      provided to the customer orally or in writing before or with the written
      confirmation of trade sent to the customer. Monthly statements must be sent
      disclosing recent price information for the penny stock held in the account
      and
      information on the limited market in penny stocks. The additional burdens
      imposed upon broker-dealers by such requirements could discourage broker-dealers
      from effecting transactions in the Company’s common stock, which could severely
      limit the market liquidity of the common stock and the ability of holders of
      the
      common stock to sell their shares.


11




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





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





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





Our
      international operations accounted for approximately 9% of our revenue in 2007
      and are expected to account for approximately 50% of our revenues in 2008.
      The
      risks involved in foreign operations that could result in losses against which
      we are not insured include:





·
                exposure
                    to local economic
                    conditions;


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


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


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


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


·
                changes
                    in foreign taxation
                    structures.





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





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





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





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


·
                managing
                    geographically dispersed
                    operations;


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


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


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





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


12




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




As
      of
      February 28, 2007, our directors and executive officers and principal
      shareholders beneficially owned or have the right to vote approximately 50%
      of
      our outstanding common stock. These stockholders, if they act together, may
      be
      able to direct the outcome of matters, including the election of our directors
      and other corporate actions, such as a merger with or into another company,
      a
      sale of substantially all of the Company’s assets, and amendments to the
      Company’s certificate of incorporation. The decisions of these stockholders may
      conflict with the Company’s interests or the interests of the Company’s other
      stockholders.





**ITEM
      1B. UNRESOLVED STAFF COMMENTS**





None.





**ITEM
      2. DESCRIPTION OF PROPERTY**





Corporate
      Offices:





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





Las
      Vegas
      Operations:





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





1.
            Mid-South
                Strip at the Hawaiian Marketplace Shopping Center (which commenced
                operations in November 2005 and replaced the location next to the
                Harley-Davidson Cafe at Harmon);


2.
            Mid-North
                Strip at the Fashion Show Mall Strip entrance in front of Neiman-Marcus
                (which commenced operations in February
                2005);


3.
            North
                Strip, just south of the Riviera Hotel;


4.
            South
                Strip at the Showcase Mall which is on the Las Vegas Strip, in front
                of
                the MGM Grand Hotel located just behind the world famous giant glass
                Coke
                bottle, ( which commenced operations in November 2007)
                and;


5.
            Downtown
                Las Vegas facility at the Four Queens Hotel fronting onto the Fremont
                Street Experience (which commenced operations in December 2005).




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





Exhibit
      Merchandising:




EM
      leases
      its combined administrative and warehouse facility in Streetsboro, Ohio under
      a
      non-cancellable operating lease. EM also leases on a month-to-month basis,
      additional storage space and housing at the locations of its exhibits, typically
      through the duration of the exhibit. Presently, we have leased additional retail
      space, storage space and housing in London, England; Vienna, Austria and
      Philadelphia, Pennsylvania.




13




Live
      Entertainment:




Live
      Entertainment has two facilities; one facility houses the Magic Arts and
      Entertainment operations, while the other facility contains NewSpace
      Entertainment. The Magic Arts and Entertainment rents its facility on a month-to
      -month basis and is located in Aurora, Ohio. The NewSpace offices are in
      Salt Lake City, Utah, pursuant to a lease that terminates on June 1, 2011,
      with
      an option to extend the term of the lease for one additional five-year
      period.




The
      aggregate minimum future rental payments under non-cancelable operating leases
      for facilities in operation at December 31, 2007, excluding operating expenses,
      annual rent escalation provisions, and contingent rental payments based on
      achieving certain pre-determined sales levels, are as follows:




**Years
                  Ending December 31,**2008
              
              $
              2,262,0002009
              
              
              2,092,0002010
              
              
              1,609,0002011
              
              
              1,136,0002012
              
              
              833,0007,932,000




**ITEM
      3. LEGAL PROCEEDINGS**





At
      December 31, 2007, we were not a party to any known or anticipated material
      legal proceedings by or against us, including its wholly-owned
      subsidiaries.





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





There
      were no matters submitted to a vote by our security holders during the fourth
      quarter of the fiscal year ended December 31, 2007.


14




**PART
      II.**





**ITEM 5.**
            **MARKET
                FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                ISSUER
                PURCHASES OF EQUITY
                SECURITIES**





(a)
      Market Information





Our
      common stock trades on the OTC Bulletin Board under the symbol “TIXC”.





The
      following table sets forth the range of reported closing prices of our common
      stock during the periods indicated. Such quotations reflect prices between
      dealers in securities and do not include any retail mark-up, mark-down or
      commission, and may not necessarily represent actual transactions. Trading
      in
      our common stock has generally been limited and sporadic, and should not be
      deemed to constitute an "established trading market". The information set forth
      below was obtained from online sources.




Low
            
            HighFiscal
                Year Ended December 31, 2006:Three
                months ended -March
                31, 2006
            
            $
            0.22
            
            $
            0.45June
                30, 2006
            
            
            0.27
            
            
            0.76September
                30, 2006
            
            
            0.75
            
            
            1.33December
                31, 2006
            
            
            1.00
            
            
            5.50Fiscal
                Year Ended December 31, 2007:Three
                months ended -March
                31, 2007
            
            $
            3.65
            
            $
            5.15June
                30, 2007
            
            
            3.80
            
            
            6.20September
                30, 2007
            
            
            5.50
            
            
            7.90December
                31, 2007
            
            
            5.35
            
            
            7.00




(b)
      Holders





As
      of
      December 31, 2007, we had 237 common shareholders of record, excluding 6,388,483
      shares held in "street name" by brokerage firms and other nominees who hold
      shares for multiple investors. We estimate that we had approximately 1,100
      beneficial common shareholders as of December 31, 2007.





(c)
      Dividends





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




(d)
      Securities Authorized for Issuance under Equity Compensation
      Plans


15




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. No option may be exercised during the first six months
      of its term except in the case of death.




During
      the year ended December 31, 2007, the Company issued options to purchase 949,000
      shares of common stock under the 2004 Option Plan. As of December 31, 2006,
      options to purchase 660,000 shares of common stock were reserved for issuance
      under the 2004 Option Plan.





2004
      Directors Option Plan:





On
      March
      3, 2005, the Company adopted the Directors Stock Option Plan (the "2004
      Directors Option Plan") for non-employee directors of the Company. The 2004
      Directors Option Plan was approved pursuant to a Joint Written Consent of the
      Board of Directors and Majority Stockholders of the Company dated September
      22,
      2004. The 2004 Directors Option Plan authorized the granting of non-qualified
      stock options to purchase an aggregate of not more than 240,000 shares of the
      Company's common stock. During 2007, the Company issued its first options to
      purchase 10,000 shares each to Andrew Pells and Sam Georges in connection with
      their becoming members of the Tix Corporation board of directors.


A
      more
      complete description of the Employee Stock Option Plans and the Directors Stock
      Option Plans is provided at "ITEM 10. EXECUTIVE COMPENSATION - Stock Option
      Plans".





Consultant
      Stock Plan:





On
      December 11, 2003, the Company adopted the 2003 Consultant Stock Plan (the
      "Consultant Stock Plan"). The purpose of the Consultant Stock Plan is to advance
      the interests of the Company by helping the Company obtain and retain the
      services of persons providing consulting services upon whose judgment,
      initiative, efforts and/or services the Company is substantially dependent,
      by
      offering to or providing those persons with incentives or inducements affording
      such persons an opportunity to become owners of capital stock of the Company.
      Consultants or advisors are eligible to receive grants under the 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. At December 31, 2007 Company has issued 1,190,757 shares under this
      plan. For the years ended December 31, 2007 and 2006 the Company issued 306,000
      and 368,800 shares under the plan.





The
      Company has also periodically entered into individual equity-based compensation
      arrangements with its officers, which are described as "ITEM 10. EXECUTIVE
      COMPENSATION- Employment Agreements" and "ITEM 10. EXECUTIVE COMPENSATION -
      Issuance of Non-Plan Stock Options, Warrants and Common Stock to Officers",
      and
      which are not included below. None of the individual compensation arrangements
      have been approved by the stockholders of the Company.


16




The
      securities authorized for issuance under the Company's equity compensation
      plans
      at December 31, 2007 are summarized as follows:





Number of securitiesto be issued uponexercise of
                outstanding
              options, warrants
              and rights
            
            Weighted-average
                exercise price of outstanding options,
                warrants and rights
            
            Number of securities
              remaining available
              for future issuance
              under equity
              compensation plans
                (excluding securities
              reflected in column
              (a))(a)
            
            (b)
            
            (c)Plan
                CategoryEquity
                compensation plans approved bysecurity
                holders (Options)
            
            
            798,500
            
            $
            5.44
            
            
            161,500Equity
                compensation plans not approved bysecurity
                holders (Options)
            
            
            490,000
            
            $
            4.92
            
            
            N/AEquity
              compensation plans not approvedby
              security holders (common stock)
            
            
            1,191,000
            
            $
            2.11
            
            
            89,000Total
            
            
            2,479,500
            
            $
            3.74
            
            
            1,050,500





Registration
      Statement on Form S-8:





On
      February 9, 2007, the Company filed with the Securities and Exchange Commission
      a registration statement on Form S-8 for the purpose of registering 1,000,000
      shares of common stock, of which 430,000 shares relate to the proposed resale
      of
      previously issued shares of restricted common stock. The remaining 570,000
      shares have been allocated to establish the 2007 Equity Incentive Plan, the
      purpose of which is to provide incentives to attract, retain and motivate
      eligible persons whose present and potential contributions are important to
      the
      success of the Company by offering them an opportunity to participate in the
      Company’s future performance through awards of options, the right to purchase
      common stock and stock bonuses.





Sales
      of
      Unregistered Securities:





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





The
      offer
      and sale of the shares sold were not registered under the Securities Act of
      1933
      in reliance upon the exemption from registration contained in Section 4(2)
      of the Securities Act and Regulation D promulgated there under. The shares
      sold in this offering may not be reoffered or sold in the United States by
      the
      holders in the absence of an effective registration statement, or exemption
      from
      the registration requirements, under the Securities Act.




17





ITEM
      6.  SELECTED CONSOLIDATED
      FINANCIAL DATA




The
        selected historical consolidated financial data for each of the years in
        the
        two-years ended December 31, 2007 and as of December 31, 2007 have been derived
        from our audited consolidated financial statements included elsewhere herein.
        The selected historical consolidated financial data for each of the years
        in the
        three-year period ended December 31, 2005 have been derived from our audited
        consolidated financial statements which are not included herein. The
        consolidated financial statements for each of the years in the five-year
        period
        ended December 31, 2007 and as of the end of each such year have been
        audited.
  The
        historical results presented below are not necessarily indicative of the
        results
        to be expected for any future period. The information should be read in
        conjunction with “Management’s Discussion and Analysis of Financial Condition
        and Results of Operations” and our financial statements and the related notes
        included herein.
  **Year
                  Ended December 31, (1), (2)****2007**
              
              **2006**
              
              **2005**
              
              **2004**
              
              **2003****Results
                  of Operations Data:**Revenue
              
              $
              18,567,000
              
              $
              5,388,000
              
              $
              2,695,000
              
              $
              1,557,000
              
              $
              -Operating
                  Expenses:Direct
                  operating expenses
              
              
              11,672,000
              
              
              2,173,000
              
              
              1,510,000
              
              
              800,000
              
              
              -Selling
                  and marketing expense
              
              
              13,475,000
              (5)
              
              467,000
              
              
              326,000
              
              
              366,000
              
              
              -General
                  and administrative expenses
              
              
              8,117,000
              
              
              3,306,000
              
              
              1,907,000
              
              
              1,488,000
              
              
              1,629,000Depreciation
                  and amortization
              
              
              1,668,000
              
              
              164,000
              
              
              109,000
              
              
              62,000
              
              
              3,000Operating
                  income (loss)
              
              
              (16,365,000
              )
              
              (722,000
              )
              
              (1,157,000
              )
              
              (1,159,000
              )
              
              (1,632,000
              )Interest
                  expense
              
              
              (104,000
              )
              
              (329,000
              )
              
              (677,000
              )
              
              (194,000
              )
              
              (154,000
              )Interest
                  income
              
              
              96,000
              
              
              15,000
              
              
              -
              
              
              -
              
              
              -Gain
                  on settlement of debt, net
              
              
              -
              
              
              1,033,000
              (3)
              
              -
              
              
              -
              
              
              -Other
                  expense (income) - net
              
              
              28,000
              
              
              37,000
              
              
              68,000
              
              
              -
              
              
              -Income
                  (loss) from continuing operations
              
              
              (16,345,000
              )
              
              34,000
              
              
              (1,766,000
              )
              
              (1,353,000
              )
              
              (1,786,000
              )Income
                  (loss) from discontinued operations
              
              
              -
              
              
              5,000
              
              
              743,000
              
              
              (264,000
              )
              
              333,000(4
              )Income
                  tax expense
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Net
                  income (loss)
              
              $
              (16,345,000
              )
              $
              39,000
              
              $
              (1,023,000
              )
              $
              (1,617,000
              )
              $
              (1,453,000
              )Net
                  income (loss) per common share-basic and dilutedFrom
                  continuing operations
              
              $
              (0.70
              )
              $
              -
              
              $
              (0.17
              )
              $
              (0.14
              )
              $
              (0.22
              )From
                  discontinued operations
              
              
              -
              
              
              -
              
              
              0.07
              
              
              (0.03
              )
              
              (0.01(4
              )Combined
                  net income (loss) per common share-basic and diluted
              
              $
              (0.70
              )
              $
              -
              
              $
              (0.10
              )
              $
              (0.17
              )
              $
              (0.23
              )**Year
                  Ended December 31, (1), (2)**
              
              **Year
                  Ended December 31,(1),(2)****2007**
              
              
              **2006**
              
              
              **2005**
              
              
              **2004**
              
              
              **2003****Balance
                  Sheet Data:**Total
                  assets
              
              $
              55,168,000
              
              $
              2,632,000
              
              $
              1,042,000
              
              $
              554,000
              
              $
              832,000Long-term
                  debt; including current maturities
              
              
              -
              
              
              -
              
              
              1,379,000
              
              
              1,062,000
              
              
              890,000Shareholders'
                  equity (deficiency)
              
              $
              51,746,000
              
              $
              378,000
              
              $
              (2,400,000
              )
              $
              (2,011,000
              )
              $
              (1,218,000
              )





(1)
      Acquisitions significantly impact the comparability of the historical
      consolidated financial data reflected in the schedule of Selected Financial
      Data.




(2)
      Through December 31, 2003, the Company was in the ride simulator business.
      This
      line of business was discontinued on December, 31, 2003. Beginning January
      1,
      2004, the Company's sole business activity was the sale of tickets for Las
      Vegas
      shows at a discount to the original box office price, on the day of the
      performance, through its then newly-formed, wholly-owned subsidiary,
      Tix4Tonight, LLC.


18


(3)
      On
      September 13, 2006, the Company repaid in full its obligation to the lender
      of
      $1,180,000 (including accrued interest of $298,000) by making final cash payment
      of $101,000. As a result, the Company recognized a non-cash gain on settlement
      of debt of $1,079,000 during the year ended December 31, 2006. Netted against
      the gain on settlement of debt is $58,000 of deferred offering costs and an
      additional $12,000 gain from a separate settlement with other lenders.





(4)
      In
      2003 the Company recorded a net gain of $349,000 as a result of the Company
      closing the of its last two ride facilities in and the Company terminating
      its
      joint venture - Tickets2Nite. The Company recorded a net loss of $81,000 related
      to the discontinuation of its ride operations a gain of $414,000 related to
      the
      termination of the joint venture - Tickets2Nite.




(5)
      During the year ended December 31,2007, the Company issued its common stock
      and
      warrants to purchase its common stock to outside consultants as compensation
      for
      services provided that had a fair market value of $10.9 million at the
      time of grant. These services were primarily attributable to our efforts to
      enter into strategic alliances with producers, presenters and
      venues. The
      Selected Financial Data should be read in conjunction with Item 7. Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations.


19




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





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





Executive
      Overview





During
      2007 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 2007 were:





**Tix4Tonight**





·
            For
                the year ended December 31, 2007, the value of the discount tickets
                sold
                increased by $10.3 million or 45% to $33.2 million,





·
            For
                the year ended December 31, 2007, the number of the discount tickets
                sold
                increased by 140,000 tickets or 24% to 714,000 tickets,




·
            In
                November 2007, we opened our fifth leased ticket location in Las
                Vegas.
                The ticket booth is located at the Showcase Mall on the Las Vegas
                Strip,
                in front of the MGM Grand Hotel located just behind the world famous
                giant
                glass Coke bottle,




·
            We
                now have a national distribution network for premium tickets as a
                result
                of our March 2007 acquisition and successful integration of John’s
                Tickets, LLC, now called
                Tix4AnyEvent,




·
            We
                completed our integration of Stand-By Golf Las Vegas into Tix4Tonight
                and
                renamed it Tix4Golf.







**Exhibit
      Merchandising**





·
            We
                acquired the assets of Exhibit Merchandising, LLC (EM) in August
                2007, and
                have substantially completed our integration of the EM operations
                into Tix
                Corporation.





·
            EM
                successfully completed its management of the Tutankhamun and the
                Golden
                Age of the Pharaohs exhibit gift shop at the Franklin Institute Science
                Museum on September 30, 2007. During the period the Exhibit was opened,
                February 3 to September 30, 2007, it drew more than 1.2 million
                visitors.





·
            EM
                successfully opened its first foreign gift shop for Tutankhamun and
                the
                Golden Age of the Pharaohs at the London O2 Dome. Tutankhamun is
                scheduled
                to be at the London O2 Dome from November 2007, until August 31,
                2008,
                during which time period the Exhibit is expected to draw more than
                1.5
                million visitors.


20





**Basis
      of Presentation**





The
      consolidated financial statements include the accounts of Tix together with
      those of its wholly-owned subsidiaries, Tix4Tonight and EM. Beginning January
      2,
      2008, they will also include the accounts and activities of TPI, our new Live
      Entertainment segment.





**Segment
      Overview:**





**Ticketing
      Services**




Our
      ticketing services are carried out by our wholly owned subsidiary Tix4Tonight.
      Tix4Tonight offers both the sale of discount and premium, tickets to live shows
      and events. Additionally, Tix4Tonight also offers discounts on meals, and golf
      tee time bookings. Tix4Tonight sells its offerings from five leased locations
      in
      Las Vegas, Nevada. The Company also maintains leased administrative offices
      for
      Tix4Tonight in Las Vegas, Nevada.





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





**Exhibit
      and Event Merchandising**




The
      Company provides exhibit and event merchandising 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.




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





**Live
      Entertainment** ****





In
      December 2007, the Company announced that it had entered into letters of intent
      to acquire two live theatrical and concert production companies; Magic Arts
      & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace).
      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. It is the Company’s intent 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 able 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
      marketplace recognition those entities have.





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




**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.




21


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.





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.




22




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.
  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:
 2007
                  
                  
                  2006Risk
                      free rate of return
                  
                  
                  4
                  %
                  
                  4
                  %Option
                      lives in years
                  
                  
                  6
                  
                  
                  6Annual
                      volatility of stock price
                  
                  
                  112.5
                  %
                  
                  112.5
                  %Dividend
                      yield
                  
                  
                  0
                  %
                  
                  0
                  %





**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
        managements 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.
 
 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.
   23




**Liquidity
      and Capital Resources:**





At
      December 31, 2007, we had cash and cash equivalents of $7.4 million
      and total assets of $55.2 million compared to $1.9 million and
      $2.6 million, respectively, at December 31, 2006. Our working capital
      totaled $8.9 million at December 31, 2007, compared to $44,000 at December
      31, 2006. We had no debt for the years ending December 31, 2007 and
      2006.





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. 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 is expected 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.





**Sources
      of Cash:**





During
      the year ended December 31, 2007, the Company raised gross proceeds of $18.
      0
      million, $17.8 million of which were the result of the Company’s sale of common
      stock and warrants. The Company also received $229,000 from the exercise of
      options and warrants. Additionally, operations provided cash of $144,000, $1.2
      million and $290,000 for the years ended December 31, 2007, 2006 and 2005
      respectively.


24




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





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





**Uses
      of Cash**





Acquisitions





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





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





Other





During
      2007, we also purchased $678,000 of fixed assets, as well as acquired certain
      website domain names for an additional $132,000.





**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.


25




**Results
      of Operations:**





**Consolidated
      Results of Operations**




%
                change
            
            %
                change2007
                v
            
            2006
                v2007
            
            2006
            
            2005
            
            2006
            
            2005Revenue
            
            
            18,567,000
            
            
            5,388,000
            
            
            2,695,000
            
            
            245
            %
            
            100
            %Operating
                Expenses:Direct
                operating expenses
            
            
            11,672,000
            
            
            2,173,000
            
            
            1,510,000
            
            
            437
            %
            
            44
            %Selling,
                general and administrative expenses
            
            
            15,934,000
            
            
            1,214,000
            
            
            779,000
            
            
            1,213
            %
            
            56
            %Depreciation
                and Amortization
            
            
            1,668,000
            
            
            164,000
            
            
            108,000
            
            
            917
            %
            
            50
            %Corporate
                expenses
            
            
            5,658,000
            
            
            2,559,000
            
            
            1,455,000
            
            
            611
            %
            
            76
            %Operating
                Loss
            
            
            (16,365,000
            )
            
            (722,000
            )
            
            (1,157,000
            )
            
            2167
            %
            
            -38
            %Operating
                Margin
            
            
            -88
            %
            
            -13
            %
            
            -43
            %Interest
                expense
            
            
            (104,000
            )
            
            (329,000
            )
            
            (677,000
            )Interest
                income
            
            
            96,000
            
            
            16,000
            
            
            -Gain
                on settlement with lender
            
            
            -
            
            
            1,078,000
            
            
            -Other
                income (expense) - net
            
            
            28,000
            
            
            (9,000
            )
            
            68,000Income
                from continuing operations
            
            
            (16,345,000
            )
            
            34,000
            
            
            (1,766,000
            )Income
                from discontinued operationsNon-cash
                gain from settlement of debts
            
            
            -
            
            
            5,000
            
            
            743,000Income
                (loss) before income taxes
            
            
            (16,345,000
            )
            
            39,000
            
            
            (1,023,000
            )Income
                tax expenseNet
                Income (Loss)
            
            
            (16,345,000
            )
            
            39,000
            
            
            (1,023,000
            )




**Revenues.**





The
      Company earns fee revenues from the sales of discounted tickets from purchasers
      of the tickets and commissions from the entertainment supplier, as well as
      revenues from the sale of premium tickets to sporting and other entertainment
      events. Through our discounted ticket venues we also offer discount dinner
      reservations 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 $18.6 million for the
      year ended December 31, 2007 as compared to $5.4 million for the year ended
      December 31, 2006, Our revenues increased $13.2 million, or 245%, during the
      year ended December 31, 2007 as compared to the same period of the prior year
      due to increases in revenues in our Ticketing Services segment of $8.9 million,
      and revenues from acquisitions that were completed during 2007.


26




During
      2006 and 2005 substantially all of our revenues were from ticket commissions
      and
      fees generated by our discount ticket operation. For the year ended December
      31,
      2006, our revenues were $5.4 million as compared to $2.7 million for the year
      ended December 31, 2005, an increase of $2.7 million or 99.9%. The increase
      was
      due to both higher ticket sales, as well as a higher value of the tickets sold.





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 and, in future periods, artist fees, show related marketing
      costs and advertising expenses along with other related costs of promoting
      and
      producing live entertainment. Direct Costs of Revenues were $11.7 million for
      the year ended December 31, 2007 as compared to $2.2 million for the year ended
      December 31, 2006. Our operating expenses increased $9.5 million or 437% during
      the year ended December 31, 2007 as compared to the same period of the prior
      year primarily as a result of a 213% 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
      in
      2006.





During
      2006 and 2005 substantially all of our direct operating costs were related
      to
      the sales of discount tickets. Direct costs of revenues were $2.2 million for
      the year ended December 31, 2006, as compared to $1.5 for the year ended
      December 31, 2005, an increase of $663, or 44%.





More
      detailed explanations of the years ended 2007 and 2006 changes are included
      in
      the applicable segment discussions following.





**Operating
      Segment Selling, Marketing and Administrative Expenses**





Operating
      segment selling, marketing and administrative expenses include advertising
      and
      promotional costs related to the Company’s business activities, as well as the
      segment cost of management. Our operating segment selling, marketing and
      administrative expenses were $15.9 million for the year ended December 31,
      2007,
      as compared to $1.2 million for the year ended December 31, 2006. Our selling,
      general and administrative expenses increased $14.7 million or 1,213%,
      during the year ended December 31, 2007 as compared to the same period of the
      prior year due to increases in selling and administrative expenses of Ticket
      Service segment of $779,000, as well the acquisition of EM in August 2007.
      We
      issue our common stock as payment for certain consulting services provided
      in
      conjunction with the development of strategic relationships with producers,
      presenters and venues. These agreements are reviewed and approved by the Board
      of Directors prior to their being entered and have durations that vary from
      two
      to four years. Due to the nature of the work being performed by the service
      provider there are no performance requirements included in these agreements,
      as
      a result the fair value of the common stock is expensed at the time the
      agreement is entered into by us. During 2007, we paid $1.7 million and issued
      common stock and warrants with a fair market value of $10.9 million to
      consultants in our efforts to enter into and expand our strategic relationships
      with producers, presenters and venues related to our ticketing services
      segment.





During
      2006 and 2005 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 $467,000 for the year ended
      December 31, 2006, as compared to $326,000 for the year ended December 31,
      2005,
      an increase of $141,000 or 43.1%. Selling and marketing expenses decreased
      to
      8.7% of revenues for the year ended December 31, 2006, as compared to 12.1%
      of
      revenues for the year ended December 31, 2005.





More
      detailed explanations of the years ended 2007 and 2006 changes are included
      in
      the applicable segment discussions following.


27





**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 $3.1 million, or 121% for the year ended December
      31, 2007, as compared to same period of the prior year. The majority of the
      increase in corporate expense related to the Company incurring $1.6 million
      in
      additional consulting expenses during 2007, of which  was attributable to
      equity compensation paid to outside consultants. We issued our common stock
      as
      payment for certain consulting services provided in conjunction with investor
      relations and public relations. These agreements were reviewed and approved
      by the Board of Directors prior to their being entered and have durations that
      vary from two to four years. Due to the nature of the work being performed
      by
      the service provider there are no performance requirements included in these
      agreements. As result the fair value of the common stock is expensed at the
      time
      these agreements were entered into by us. Further, we paid an additional
      $600,000 in consulting expenses related to our efforts to expand and improve
      our investor relations programs. Employee compensation expense increased
      $1.2 million during 2007. The increase was attributable to a $1.0 million
      increase in employee stock option expense resulting from employee stock option
      grants of which 822,000 were granted in 2007. Additionally corporate payroll
      and
      related expenses increased approximately $200,000 during 2007. The increase
      was
      attributable to additional administrative personnel being added to the payroll
      during 2007 and employees added in 2006 being employed for the entire year.





Corporate
      expenses increased $1.1 million, or 75% for the year ended December 31, 2006.
      Included in general and administrative expenses were non-cash equity-based
      costs
      of $1.3 million for the year ended December 31, 2006 (including $658,000
      non-cash equity-based costs for officers and directors); as compared to $238,000
      non-cash equity-based costs for the year ended December 31, 2005 (There were
      no
      non-cash equity-based costs for officers and directors).





**Depreciation
      and Amortization**





Our
      depreciation and amortization was $1.7 million and $164,000 for the years ended
      December 31, 2007 and 2006 respectively. The approximate increase of $1.6
      million in depreciation and amortization expense in 2007, primarily reflect
      a
      $1.4 million increase in amortization expense and a $200,000 increase in
      depreciation expense. The increase in amortization expense relates primarily
      to
      a $14.9 million increase in amortizable intangible assets resulting from our
      acquisition of Exhibit Merchandising, LLC in August 2007 and John’s Tickets in
      March 2007, and to a lesser extent an increase in depreciable assets resulting
      from the acquisitions.





During
      2006 and 2005 substantially all of our depreciation expenses were related to
      our
      Ticket Services segment. Depreciation and amortization was $164,000 for the
      year
      ended December 31, 2006, as compared to $109,000 for the year ended December
      31,
      2005, an increase of $55,000 or 51.0%, primarily as a result of an increase
      in
      leasehold improvements and equipment acquired for Tix4Tonight’s new ticketing
      locations in Las Vegas.





**Other
      Income and (Expense)**





Other
      Income and Expense was immaterial for all periods presented.





**Gain
      on Settlement with Lender**





On
      September 13, 2006, the Company repaid in full its obligation to
      Finova/Steamboat of $1,180,493 (including accrued interest of $297,632) by
      making final cash payment of $101,697. As a result, the Company recognized
      a
      non-cash gain on settlement with lender of $1,078,000 during the year ended
      December 31, 2006. There were no comparable events in 2007 or 2005.





**Interest
      Income**





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


28






**Interest
      Expense**





Interest
      expense was $104,000, $329,000 and $677,000 for the years ended December
      31, 2007, 2006 and 2005. Interest Expense incurred in 2007 was $76,000 related
      to a $2.0 million note payable with a related party with an additional $28,000
      being incurred as a result of capital leased assets. Interest expense was
      $329,000 in 2006 as compared to $677,000 for the year ended December 31, 2005,
      a
      decrease of $348,000. The decrease in interest expense in 2006 as compared
      to
      2005 was in part a result of non-cash interest charges generated by the
      amortization of the discount related to the debentures that were issued in
      December 2004 and January 2005 being fully amortized through March 31, 2006.





For
      the
      year ended December 31, 2006, $101,000 of interest expense related to the
      premium paid on the March 29, 2006, May 30, 2006 and July 1, 2006 installment
      payments on the Debentures pursuant to the Agreement. For the year ended
      December 31, 2005, $80,000 of interest expense was the result of the Company
      not
      having timely accomplished an effective registration statement with the SEC
      to
      register the shares of common stock issuable upon conversion of the Debentures
      by March 31, 2005.





**Cash
      Flows**





**Year
                Ended December 31,****2007**
            
            **2006**
            
            **2005**Cash
                provided by (used in):Operating
                activities
            
            
            144,000
            
            
            1,169,000
            
            
            290,000Investing
                activities
            
            
            (12,642,000
            )
            
            (41,000
            )
            
            (221,000
            )Financing
                activities
            
            
            17,972,000
            
            
            499,000
            
            
            116,000





**Operating
      Activities**





During
      the last few years, we have relied on the proceeds from loans from both
      unrelated and related parties and the sale of our debt and equity
      securities to provide the resources necessary to execute our business strategy.





**Year
      Ended 2007 Compared to Year Ended 2006**





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





**Year
      Ended 2006 Compared to Year Ended 2005**





Cash
      provided by operations was $1.2 million for the year ended December 31, 2006,
      compared to cash provided from operations of $290,000 for the year ended
      December 31, 2005. The $910,000 increase in cash provided by operations
      primarily resulted from an increase in net income, adjusted for non-cash charges
      and accounts reflecting non-operating activities, Net income in 2006 was $39,000
      as compared to a $1.0 million loss in 2005. During 2006, we settled our
      outstanding debt with a lender, the transaction resulted in our recognizing
      a
      $1.1 million gain on the transaction, and there was no comparable transaction
      in
      2005. Offsetting this gain we issued common stock for services in the amount
      of
      $1.2 million for the year ended December 31, 2006, as compared to $223,000
      for
      the year ended December 31, 2005. The remaining amounts relate to operating
      accounts that are reflective of the level and timing of activity that occurred
      during the period, i.e., accounts receivable, accounts payable and accrued
      liabilities.


29


**Investing
      Activities**





**Year
      Ended 2007 Compared to 2006**





Cash
      used
      in investing activities was $12.7 million for the year ended December 31, 2007
      compared to $41,000 in 2006. The increase in cash used in investing activities
      is reflective of our acquiring the assets of Exhibit Merchandising, LLC (Ohio)
      for $11.4 million and AnyEvent, LLC for $396,000. There were no comparable
      events in 2006. Additionally, in 2007 we made investments in our infrastructure
      (e.g., telephone system and intellectual property) of $703,000.





**Year
      Ended 2006 Compared to 2005**





Cash
      used
      in investing activities was $41,000 for the year ended December 31, 2006
      compared to $221,000 in 2005. The decrease in cash used in investing activities
      is reflective of the opening of three new ticket facilities in 2005, while
      during the year ended December 31, 2006, no new discount ticket locations were
      added.,




**Financing
      Activities**





**Year
      Ended 2007 Compared to 2006**





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





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





**Year
      Ended 2006 Compared to 2005**





Cash
      provided from financing activities was $499,000 for the year ended December
      31,
      2006 compared to $116,000 for the year ended December 31, 2005. The $383,000
      increase in cash provided from financing activities during the year ended
      December 31, 2006, primarily reflects $1.0 million of proceeds resulting from
      the sale of our common stock and warrants and the receipt of $214,000 resulting
      from the exercise of options and warrants that were offset by $714,000 in
      payments related to notes payable, capital lease obligations and convertible
      debentures. During the year ended December 31, 2005 we received $239,000 as
      a
      result of the conversion of convertible debentures into its common stock that
      was offset by the repayment of $123,000 related to notes payable and capital
      lease obligations.





**Discussion
      of Segment Results**





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.


30


Our
      ticketing services are carried out by our wholly owned Tix4Tonight subsidiary,
      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.”




In
      December 2007, the Company announced that it had entered into letters of intent
      to acquire two live theatrical and concert production companies; Magic Arts
      & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace). As
      part of the letters of intent the managements’ of Magic and NewSpace would
      manage the operations of their respective companies’ for the benefit of Tix
      Corporation from January 2, 2008 until the transactions could be finalized.
      The
      managements’ of Magic and NewSpace were required to consult and obtain the
      approval of the management of Tix Corporation prior to entering into any long
      term arrangements or transactions that were outside the normal course of
      business. Further, Tix Corporation assumed all responsibility for any losses
      or
      profits that might be incurred or earned during this period by both Magic and
      NewSpace. The acquisition of Magic was completed on February 29, 2008 and the
      acquisition of NewSpace was completed on March 12, 2008.  Both Magic
      and NewSpace 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.


31


Information
      related to our operating segments is as follows:





**Consolidating
                Statement of Operations****Ticketing**
            
            **Exhibit**
            
            **Corporate**
            
            
            
            **Consolidated****Services**
            
            **Merchandising**
            
            **Expenses**
            
            **Eliminations**
            
            **and
                Combined****2007**Revenue
            
            $
            14,284,000
            
            $
            4,283,000
            
            $
            -
            
            $
            -
            
            $
            18,567,000Direct
                operating expenses
            
            
            8,829,000
            
            
            2,843,000
            
            
            
            
            
            
            
            
            11,672,000Selling,
                general and administrative expenses
            
            
            15,029,000
            
            
            905,000
            
            
            5,658,000
            
            
            -
            
            
            21,592,000Depreciation
                and amortization
            
            
            195,000
            
            
            1,229,000
            
            
            244,000
            
            
            
            
            
            1,668,000Operating
                income (loss)
            
            $
            (9,769,000
            )
            $
            (694,000
            )
            $
            (5,902,000
            )
            $
            -
            
            $
            (16,365,000
            )Total
                assets
            
            $
            2,977,000
            
            $
            47,224,000
            
            $
            4,967,000
            
            $
            -
            
            $
            55,168,000**2006**Revenue
            
            $
            5,388,000
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            5,388,000Direct
                operating expenses
            
            
            2,173,000
            
            
            
            
            
            
            
            
            
            
            
            2,173,000Selling,
                general and administrative expenses
            
            
            1,214,000
            
            
            
            
            
            2,559,000
            
            
            
            
            
            3,773,000Depreciation
                and amortization
            
            
            159,000
            
            
            
            
            
            5,000
            
            
            
            
            
            164,000Operating
                income (loss)
            
            $
            1,842,000
            
            $
            -
            
            $
            (2,564,000
            )
            $
            -
            
            $
            (722,000
            )Total
                assets
            
            $
            1,699,000
            
            $
            -
            
            $
            933,000
            
            $
            -
            
            $
            2,632,000




32


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





**Ticketing
      Services:**




**Our
      Ticketing Services segment operating results were as
      follows:**




**Segment
      Reporting (T4T, AE)**




**Year
                  Ended December 31,**
              
              
              **%
                  Change**
              
              
              **%
                  Change****2007**
              
              
              **2006**
              
              
              **2005**
              
              
              **2007
                  vs.**
                **2006**
              
              
              **2006
                  vs.**
                **2005**Revenue
              
              $
              14,284,000
              
              $
              5,388,000
              
              $
              2,695,000
              
              
              165
              %
              
              100
              %Operating
                Expenses:Direct
                  operating expenses
              
              
              8,829,000
              
              
              2,173,000
              
              
              1,510,000
              
              
              306
              %
              
              44
              %Selling,
                  general and administrative expenses
              
              
              15,029,000
              
              
              1,214,000
              
              
              779,000
              
              
              1,138
              %
              
              56
              %Depreciation
                  and amortization
              
              
              195,000
              
              
              159,000
              
              
              107,000
              
              
              23
              %
              
              49
              %Operating
                  income (loss)
              
              $
              (9,769,000
              )
              $
              1,842,000
              
              $
              299,000
              
              
              50
              %
              
              516
              %Operating
                  margin


33


**Revenues.**





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





During
      2006 and 2005 substantially all of our revenues were from ticket commissions
      and
      fees generated by our discount ticket operation. For the year ended December
      31,
      2006, our revenues were $5.4 million as compared to $2.7 million for the year
      ended December 31, 2005, an increase of $2.7 million or 99.9%. The average
      ticket price increased to $36.38 in 2006, as compared to $28.25 in 2005.
      Commissions and fees were earned on the gross sales value of show tickets sold
      to customers of $23.2 million for the year ended December 31, 2006, as
      compared to $10.3 million for the year ended December 31, 2005, an increase
      of $12.9 million or 125.2%. The Company sold 573,597 tickets in 2006, as
      compared to 319,238 tickets in 2005, an increase of 254,359 tickets or 79.7%.
      Revenues from dinner reservations and golf reservations, introduced in the
      second half of 2006, were not material.





**Direct
      operating expenses**





Tix4Tonight
      direct operating expenses include payroll and related costs, rents, and cost
      of
      tickets sold. Direct Costs of Revenues were $8.8 million for the year ended
      December 31, 2007 as compared to $2.2 million for the year ended December 31,
      2006. Our operating expenses increased $6.6 million or 300%. The higher
      operating expenses were reflective of the higher revenues from our existing
      discount ticket operations, as well as the acquisition of AnyEvent.





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


34


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





During
      2006 and 2005 substantially all of our direct operating costs were related
      to
      the sales of discount tickets. Direct costs of revenues were $2.2 million for
      the year ended December 31, 2006, as compared to $1.5 for the year ended
      December 31, 2005, an increase of $663, or 44%. Direct costs of revenues
      decreased to 40.3% of revenues for the year ended December 31, 2006, as compared
      to 56.0% of revenues for the year ended December 31, 2005, as a result of a
      slower rate of increase in direct costs of revenues as compared to the growth
      in
      revenues in 2006 as compared to 2005. Direct costs of revenues increased on
      an
      absolute basis in 2006 as compared to 2005 as a result of an increase in rent
      expense of $300,000 relating to an increase in the number of ticketing locations
      and contingent rent based upon achieving significant revenue increases, and
      as a
      result of an increase in personnel costs of $328,000 resulting from the hiring
      additional employees to staff these locations.





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




During
      2006 and 2005 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 $1.2 million for the year
      ended December 31, 2006, as compared to $779,000 for the year ended December
      31,
      2005, an increase of $435,000 or 55%. Selling and marketing expenses decreased
      21% to 23% of revenues for the year ended December 31, 2006, as compared to
      29%
      of revenues for the year ended December 31, 2005.  The
      decrease reflects the higher revenues earned at Tix4Tonight.





**Exhibit
      Merchandising:**





**Our
      Exhibit Merchandising segment operating results were as
      follows:**





**Segment
      Reporting - Exhibit Merchandising**




**Year
                Ended December 31,**
            
            **%
                Change**
            
            **%
                Change****2007**
            
            **2006**
            
            **2005**
            
            **2007 vs. 2006**
            
            **2006 vs. 2005**Revenue
            
            $
            4,283,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/AOperating
                Expenses:Direct
                operating expenses
            
            
            2,843,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/ASelling,
                general and administrative expenses
            
            
            905,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/ADepreciation
                and amortization
            
            
            1,229,000
            
            
            -
            
            
            -
            
            
            N/A
            
            
            N/AOperating
                income (loss)
            
            $
            (694,000
            )
            
            -
            
            
            -
            
            
            N/A
            
            
            N/AOperating
                margin
            
            
            (16
            )%
            
            N/A
            
            
            N/A


35




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 spaced rented in conjunction with the exhibit. From
      August 8, 2007 to December 31, 2007, EM earned $4.3 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
      exhibit 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.
      During the fourth quarter “Tutankhamun and The Golden Age of the Pharaohs” for
      six weeks was closed down as it was moving from Philadelphia, Pennsylvania
      to
      London, England.




**Direct
      operating expenses**





EM’s
      operating expenses include payroll and related costs, rents, and cost of goods
      sold. Direct operating expenses were $2.8 million or 64% of revenues for the
      year ended December 31, 2007.




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 first five months of operations reflects a charge
      of
      approximately $202,000 related to this increase in the inventory on hand at
      the
      time we acquired EM.


36


**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.





**Contractual
      Obligations and Commitments:**





At
      December 31, 2007, the Company did not have any material commitments for capital
      expenditures. The Company’s principal commitments for the next five fiscal years
      consisted of contractual commitments as summarized below.





**Payments
                due by Fiscal Years Ending December 31,****Total**
            
            **2008**
            
            **2009**
            
            **2010**
            
            **2011**
            
            **2012****Employment
                agreement**
            
            $
            3,950,000
            
            $
            1,744,000
            
            $
            1,273,000
            
            $
            875,000
            
            $
            58,000
            
            
            -**Capital
                lease obligations**
            
            
            186,000
            
            
            62,000
            
            
            58,000
            
            
            61,000
            
            
            3,000
            
            
            2,000**Operating
                lease obligations**
            
            
            7,932,000
            
            
            2,262,000
            
            
            2,092,000
            
            
            1,609,000
            
            
            1,136,000
            
            
            833,000**Total
                contractual cash obligations**
            
            $
            12,068,000
            
            $
            4,068,000
            
            $
            3,423,000
            
            $
            2,545,000
            
            $
            1,197,000
            
            $
            835,000




Off-Balance
      Sheet Arrangements:





At
      December 31, 2006, the Company did not have any transactions, obligations or
      relationships that could be considered off-balance sheet
      arrangements.





37





**ITEM
      8. FINANCIAL STATEMENTS**





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




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





Not
      applicable.




**Item
        8A**   **Control
        and Procedures**
 
 **Disclosure
        Controls and Procedures**
 
 We
        maintain disclosure controls and procedures that are designed to ensure that
        the
        information disclosed in the reports we file with the Securities and Exchange
        Commission under the Exchange Act is recorded, processed, summarized and
        reported within the time periods specified in the Securities and Exchange
        Commission’s rules and forms, and that such information is accumulated and
        communicated to our management, including our Chief Executive Officer and
        Chief
        Financial Officer, as appropriate, to allow timely decisions regarding required
        disclosure.
 
 Management,
        including our Chief Executive Officer and Chief Financial Officer, evaluated
        the
        effectiveness of our disclosure controls and procedures, as of December 31,
        2007, in accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act.
        Based on that evaluation and the existence of certain material weaknesses
        discussed below under “Management’s Report on Internal Control Over Financial
        Reporting,” our Chief Executive Officer and Chief Financial Officer concluded
        that our disclosure controls and procedures were not effective as of
        December 31, 2006.
 
 During
        the fourth quarter, several controls were implemented with regards to
        purchasing, accounting, hire-to-pay and financial reporting that occurred
        during
        the quarter ended December 31, 2007, with our preparation for conforming
        with Sarbanes-Oxley Act of 2002 that materially affected, or is reasonably
        likely to materially affect, our internal control over financial reporting.
 
 **Management’s
        Report on Internal Control Over Financial Reporting**
 
 Our
        management is responsible for establishing and maintaining adequate internal
        control over financial reporting. Our internal control over financial reporting
        is a process designed to provide reasonable assurance regarding the reliability
        of financial reporting and the preparation of the consolidated financial
        statements and related disclosures in accordance with generally accepted
        accounting principles. Our internal control over financial reporting includes
        those policies and procedures that (1) pertain to the maintenance of
        records that, in reasonable detail, accurately and fairly reflect the
        transactions of our company; (2) provide reasonable assurance that
        transactions are recorded as necessary to permit preparation of the consolidated
        financial statements and related disclosures in accordance with generally
        accepted accounting principles; (3) provide reasonable assurance that our
        receipts and expenditures are being made only in accordance with authorizations
        of our management and directors; and (4) provide reasonable assurance
        regarding prevention or timely detection of unauthorized acquisition, use,
        or
        disposition of our assets that could have a material effect on our consolidated
        financial statements and related disclosures.
 
 Because
        of inherent limitations, internal control over financial reporting may not
        prevent or detect misstatements. Also, projections of any evaluation of
        effectiveness to future periods are subject to the risk that controls may
        become
        inadequate because of changes in conditions, or that the degree of compliance
        with policies and procedures may deteriorate.
 
 We
        assessed the effectiveness of our internal control over financial reporting
        as
        of December 31, 2007. In making this assessment, management used the criteria
        set forth by the Committee of Sponsoring Organizations of the Treadway
        Commission (“COSO”) in *Internal
        Control-Integrated Framework* .
 
 Based
        upon management’s assessment using the criteria contained in COSO, and for the
        reasons discussed below, our management has concluded that, as of
        December 31, 2007, our internal control over financial reporting were
        determined to be effective.


38


The
      Company carried 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. 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





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.




**ITEM
      8B. OTHER INFORMATION**





None.




PART
      III.




**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
      WITH SECTION 16(a) OF THE EXCHANGE ACT**




The
      following table and text set forth the names and ages of all directors and
      executive officers of the Company as of February 28, 2008. The Board of
      Directors is comprised of only one class. All of the directors will serve until
      the next annual meeting of stockholders and until their successors are elected
      and qualified, or until their earlier death, retirement, resignation or removal.
      There are no family relationships among directors and executive officers. There
      are no arrangements or understandings between any two or more of the Company's
      directors or executive officers. Except as noted below, there is no arrangement
      or understanding between any of the Company's directors or executive officers
      and any other person pursuant to which any director or officer was or is to
      be
      selected as a director or officer, there is no arrangement, plan or
      understanding as to whether non-management shareholders will exercise their
      voting rights to continue to elect the current board of directors, and there
      are
      also no arrangements, agreements or understandings between non-management
      shareholders that may directly or indirectly participate in or influence the
      management of the Company's affairs.





As
      a
      condition to the Closing, of the Company’s acquisition of Exhibit Merchandising,
      LLC (EM) the Company entered into a Voting Agreement with Joseph Marsh, a former
      owner of EM pursuant to which, for a period of four years, Mr. Marsh
      granted the Company, through its board of directors, the right to vote all
      of
      his shares, including the shares acquired pursuant to the Asset Purchase
      Agreement. As of the date hereof, such shares total 4,401,599.





On
      September 11, 2006, Mitch Francis, the President and Chief Executive Officer
      of
      the Company, entered into a Voting Agreement (the “Agreement") dated as of July
      12, 2006 with Iqbal Ashraf, an individual. The parties entered into the
      Agreement in connection with the Company's private equity financing with
      accredited investors. Pursuant
      to the Agreement, Mr. Ashraf agreed to grant voting power to Mr. Francis over
      2,000,000 shares of the Company's common stock and 1,000,000 shares of common
      stock issuable upon exercise of a warrant that Mr. Ashraf holds (the "Voting
      Shares"). The parties agreed that at each shareholders meeting of the Company
      at
      which a vote will take place and in connection with any action by written
      consent, Mr. Francis will vote the Voting Shares (or execute such written
      consent) or cause the Voting Shares to be voted (or such consent to be
      executed).


39


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





Name
            
            Age
            
            Position(s)Mitch
                Francis
            
            53
            
            Chairman
                of the Board of Directors, President, Chief Executive Officer and
                Chief
                Financial OfficerKimberly
                Simon
            
            40
            
            Chief
                Operating OfficerMatthew
                Natalizio
            
            53
            
            Chief
                Financial OfficerBenjamin
                Frankel
            
            72
            
            DirectorNorman
                Feirstein
            
            59
            
            DirectorSam
                Georges
            
            62
            
            DirectorAndrew
                Pells
            
            52
            
            Director





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





Biographies
      of Directors and Executive Officers:





Mitch
      Francis has been the Chairman of the Board of Directors since June 1993, has
      been Chief Executive Officer and President since the Company's inception in
      April 1993, and was Chief Financial Officer March 1999 until September 2007.
      Prior to founding the Company, Mr. Francis was involved in site acquisition,
      analysis, architectural design, construction, management and marketing of
      numerous residential and commercial real estate projects, and has been the
      general partner of numerous real estate limited partnerships. Mr. Francis is
      also the President and principal shareholder of Francis Development Inc., a
      real
      estate development company that he founded in 1981.





Kimberly
      Simon has been employed by the Company for nearly nine years. Ms. Simon started
      her career with the Company in September 1997 as the general manager of the
      Company's Las Vegas ride simulator facility. While retaining that capacity,
      she
      assumed the responsibility for overseeing the management of all of the Company's
      ride simulator facilities and was promoted to Vice President of Operations
      effective May 1, 2001. Effective March 1, 2007, Ms. Simon was promoted to Chief
      Operating Officer and is responsible for all day-to-day operations. Prior to
      joining the Company, Ms. Simon gained managerial experience with several
      national companies. Ms. Simon graduated from Northern Illinois University with
      a
      Bachelor’s Degree.


40


Matthew
      Natalizio, as Chief Financial Officer of the Company since September 2007.
      Prior
      to joining us Mr. Natalizio was the CFO of CytRx Corporation from July 2004
      to
      September 2007and from November 2002 to December 2003, he was President and
      General Manager of a privately held furniture manufacturing company. Prior
      to
      that, from January 2000 to October 2002, he was Chief Financial Officer of
      Qualstar Corporation, a publicly traded designer and manufacturer of data
      storage devices. Mr. Natalizio is a CPA and was a Senior Manager at KPMG. He
      earned his Bachelor of Arts degree in Economics from the University of
      California, Los Angeles.





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





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





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




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




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





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




To
      the
      Company’s knowledge based solely on its review of the copies of the Section
      16(a) reports furnished to the Company and written representations to the
      Company that no other reports were required, the Company believes that all
      individual filing requirements applicable to the Company's directors and
      executive officers were complied with under Section 16(a) during 2006, except
      as
      follows:





Kimberly
      Simon did not timely file various Form 4’s with respect to the issuance of
      options to purchase shares of the Company’s common stock to her.





The
      Company is in the process of establishing improved internal procedures to insure
      the timely filing of such reports in the future.





Family
      Relationships among Directors and Executive Officers:





There
      were no family relationships among directors and executive officers during
      the
      years ended December 31, 2007, 2006 and 2005.





Indebtedness
      of Directors and Executive Officers:





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


41


Legal
      Proceedings with Affiliates:





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





Code
      of
      Ethics:





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





Changes
      in Procedures to Nominate Directors:





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





ITEM
      10.
      EXECUTIVE COMPENSATION





The
      following table and text sets forth information with respect to the compensation
      paid to the Company’s senior executive officers during the year ended
      December 31, 2007, 2006 and 2005. Except as listed below, there are no
      bonuses, other annual compensation, restricted stock awards or stock
      options/SARs or any other compensation paid to the named executive
      officers.





SUMMARY
      COMPENSATION TABLE




Name
                and PrincipalPosition
            
            Year
              Ended
                 December 31,
            
            Base
              Salary
              $
            
            Bonus $
            
            Stock
              Awards$
            
            Option
                Awards$
            
            All
                Other Compensation$
            
            Total
                Compensation$Mitch
                Francis (1)
            
            
            2007
            
            
            297,000
            
            
            -
            
            
            36,664
            (2)
            
            -
            
            
            39,149
            (3)
            
            372,813Chief
                Executive Officer,
            
            
            2006
            
            
            275,000
            
            
            
            
            
            253,000Chairman
                of the Board
            
            
            2005
            
            
            275,000Kimberly
                Simon
            
            
            2007
            
            
            225,000
            
            
            21,000
            
            
            11,000
            (4)
            
            302,000
            (9)
            
            10,000
            (6)
            
            569,000Chief
                Operating Officer
            
            
            2006
            
            
            109,000
            
            
            15,000
            
            
            131,000
            
            
            120,000
            
            
            8,000
            
            
            383,0002005
            
            
            94,000
            
            
            
            
            
            
            
            
            
            
            
            27,000
            
            
            121,000Matthew
                Natalizio
            
            
            2007
            
            
            62,000
            
            
            
            
            
            
            
            
            216,000
            (8)
            
            
            
            
            215,000Chief
                Financial Officer





42


(1)  
      Compensation to Mr. Francis was paid to Francis Development Inc., a company
      founded and controlled by Mr. Francis, for the year ended December 31, 2005
      and
      for the six months ended June 30, 2006. Beginning July 1, 2006, compensation
      to
      Mr. Francis has been paid to him directly.





(2)  
      During March 2006, the Company issued 500,000 shares of common stock pursuant
      to
      a new three-year employment agreement with Mr. Francis. The 500,000 shares
      of
      common stock had a fair market value on the date of issuance of $110,000 ($0.22
      per share), which is being charged to operations as general and administrative
      expense over the three-year period commencing March 1, 2006. For the year ended
      December 31, 2007, 305,557 shares of common stock had vested and were recorded
      at their approximate fair market value. During the years ended December 31,
      2007
      and 2006 the Company recorded $36,664 and $30,556, respectively, which was
      charged to operations as general and administrative expense.





On
      September 28, 2006, the Company issued 200,000 shares of common stock to Mr.
      Francis, as a bonus for services rendered. The shares of common stock were
      recorded at their fair market value on the date of issuance of $222,000 ($1.11
      per share) and were charged to operations as general and administrative expense
      during the year ended December 31, 2006.





(3)  
      Includes $10,501 of disability insurance premiums, $17,858 of automobile
      expense, $6,790 of life insurance premiums and $4,000 for personal tax
      consultation paid to or on behalf of Mr. Francis in 2007.





(4)  
      On September 27, 2007, the Company entered into a written employment agreement
      with Kimberly Simon, in conjunction with the agreement the Compensation
      Committee of the Company’s board of directors granted Ms. Simon a ten-year,
      nonqualified stock option to purchase 300,000 shares of our common stock at
      a
      price of $7.00 per share.  The options will vest in three installments of
      100,000 shares each on September 1, 2008, 2009 and 2010, subject to Ms. Simon
      remaining in the continuous employ of the Company through such vesting
      dates.  Upon termination of Ms. Simon’s employment agreement for any reason
      other than “cause” (as defined), any options not previously vested will
      immediately vest and be exercisable for a period of one year from the date
      of
      termination.





(5)
      On
      March 13, 2006, the Company issued 50,000 shares of common stock to Ms. Simon,
      as a bonus for services rendered. The shares of common stock were recorded
      at
      their fair market value on the date of issuance of $11,000 ($0.22 per share)
      and
      were charged to operations as general and administrative expense during the
      year
      ended December 31, 2006.




On
      March
      13, 2006, the Company issued 150,000 shares of common stock to Ms. Simon. The
      shares of common stock are subject to pro rata forfeiture over a three-year
      period if Ms. Simon ceases to be employed by the Company. The 150,000 shares
      of
      common stock had a fair market value on the date of issuance of $33,000 ($0.22
      per share), which is being charged to operations as general and administrative
      expense over the three-year period commencing March 13, 2006. For the years
      ended December 31, 2007, 89,583 shares of common stock had vested and were
      recorded at their approximate fair market value. During the years ended December
      31, 2007 and 2006, the Company recorded $11,000 and $9,000 respectively, which
      was charged to operations as general and administrative expense.





On
      September 28, 2006, the Company issued 100,000 shares of common stock to Ms.
      Simon, as a bonus for services rendered. The shares of common stock were
      recorded at their fair market value on the date of issuance of $111,000 ($1.11
      per share) and were charged to operations as general and administrative expense
      during the year ended December 31, 2006.





(6)  
      On January 18, 2006, the Company entered into an agreement with Ms. Simon that
      provides for her to receive a bonus in the form of a warrant for 100,000 shares
      of common stock, exercisable for a period of five years at $0.36 per share
      (the
      fair market value on the date of the agreement), that vests only in the event
      that the gross number of tickets sold in 2006 is at least equal to 125% of
      the
      gross number of tickets sold in 2005. As of June 30, 2006, the Company had
      determined that such vesting milestone had been met. Accordingly, the fair
      value
      of such warrant of $70,000, calculated pursuant to the Black-Scholes
      option-pricing model, was charged to operations as general and administrative
      expense during the remainder of the year ended December 31, 2006.


43


On
      April
      19, 2006, the Company extended the expiration date of a stock option to purchase
      150,000 shares of common stock held by Ms. Simon. The expiration date was
      extended from June 5, 2006 to June 5, 2009. The fair value of such stock option
      of $49,500, as calculated pursuant to the Black-Scholes option-pricing model,
      was credited to additional paid-in capital and was charged to operations as
      general and administrative expense during the year ended December 31, 2006.





(7)  
      Includes $7,000 of automobile expense, $2,000 of medical insurance premiums
      and
      $1,000 for personal tax consultation paid to or on behalf of Ms. Simon in
      2007.





(8)
      In
      conjunction with his employment agreement, Mr. Natalizio was granted a ten-year,
      nonqualified option to purchase 340,000 shares of our common stock at a price
      of
      $7.00 per share, which equaled the closing market price of our common stock
      on
      the date Mr. Natalizio, commenced service. The first 40,000 options vested
      immediately and the remaining 300,000 stock options will vest annually over
      a
      three-year period, provided that Mr. Natalizio remains in our employ.




(9)
      In
      conjunction with the extension of her employment agreement, Ms. Simon was
      granted an option to purchase 300,000 shares of common stock at a price of
      $7.00
      per share, which equaled the closing market price on the date of the grant.
      The options will vest annually over a three year period, provided Ms. Simon
      remains in our employ(see SeverenceAgreement following).


Stock
      Option and Warrant Grants:




The
      following table sets forth information as of December 31, 2007 concerning
      unexercised options and warrants, unvested stock and equity incentive plan
      awards for the executive officers named in the Summary Compensation Table.
      For
      additional information related to stock options and the valuation of stock
      options see footnote 11 to the consolidated financial statements.




OUTSTANDING
      EQUITY AWARDS AT YEAR ENDED DECEMBER 31, 2007




Option
                and Warrant Awards
            
            Stock
                AwardsName
            
            Number
                of Securities Underlying Unexercised Options and
                Warrants
              (#)
                Exercisable
            
            Number
                of Securities Underlying Unexercised Options and
                Warrants
              (#)
                Unexercisable
            
            Equity
                Incentive Plan Awards: Number of Securities Underlying Unexercised
                Unearned Options and Warrants
              (#)
            
            OptionandWarrant
                Exercise Price
              ($)
            
            OptionandWarrant
                Expiration Date
            
            Number
              of
              Shares
              or Units
              of Stock
                That Have Not Vested
              (#)
            
            Market
                Value of Shares or Units of Stock That Have Not
                Vested
              ($)
            
            Equity
                Incentive Plan Awards: Number of Unearned Shares, Units or
                Other Rights
              That
              Have Not
                Vested
              (#)
            
            Equity
              Incentive
              Plan
              Awards:
              Market
              or Payout
                Value of Unearned Shares, Units or Other
              Rights
              That
              Have Not
                Vested($)Mitch
                Francis
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            361,111
            
            
            1,596,111
            
            
            -
            
            
            -Chief
                Executive OfficerKimberly
                Simon
            
            
            
            
            
            300,000
            
            
            
            
            
            7.00
            
            
            9-27-2017
            
            
            -
            
            
            -
            
            
            -
            
            
            -Chief
                Operating Officer
            
            
            150,000
            
            
            -
            
            
            -
            
            
            0.15
            
            
            6-05-2009
            
            
            110,417
            
            
            488,043
            
            
            -
            
            
            -100,000
            
            
            -
            
            
            -
            
            
            0.36
            
            
            2-27-2012
            
            
            -
            
            
            -
            
            
            -
            
            
            -50,000
            
            
            -
            
            
            -
            
            
            0.41
            
            
            5-13-2008
            
            
            -
            
            
            -
            
            
            -
            
            
            -Matthew
                Natalizio
            
            
            40,000
            
            
            300,000
            
            
            -
            
            
            7.00
            
            
            9-10-2017
            
            
            -
            
            
            -
            
            
            -
            
            
            -Chief
                Financial Officer


44


Meetings
      and Committees of the Board of Directors:





During
      the year ended December 31, 2007, the Company’s Board of Directors met on two
      occasions. Additional board actions were taken by unanimous written
      consent.





The
      Company has a Nomination and Governance Committee of the Board of Directors.
      The
      purpose of the Nomination and Governance Committee of the Board of Directors
      of
      Tix Corporation is to assist the Board in discharging its duties relating to
      corporate governance and the composition and evaluation of the
      Board.





The
      Compensation Committee of the Board of Directors consists of the three directors
      of the Company Andy Pells, Norman Feirstein and Sam Georges, none of whom is
      an
      employee of the Company. The compensation committee reviews the performance
      of
      the executive officers of the Company and reviews the compensation programs
      and
      agreements for key employees, including salary and bonus levels.





The
      Audit
      Committee of the Board of Directors consists of Andy Pells, Norman Feirstein
      and
      Sam Georges, none of whom is an employee of the Company. The audit committee
      reviews, acts on and reports to the Board of Directors with respect to various
      auditing and accounting matters, including the selection of the Company's
      independent public accountants, the scope of the annual audits, the nature
      of
      non-audit services, the fees to be paid to the independent public accountants,
      the performance of the independent public accountants, and the accounting
      practices of the Company.


Directors
      Compensation:





For
      serving on the Board of Directors, directors who are not employees of the
      Company receive $2,000 for each meeting of the Board of Directors, and
      reimbursement for any expenses incurred in attending board meetings. Directors
      who are employees of the Company receive no additional compensation for serving
      on the Board of Directors. The non-employee directors are eligible to
      participate in the 2004 Directors Option Plan.





On
      March
      13, 2006, the Company issued 150,000 shares of common stock to Benjamin Frankel
      and 150,000 shares of common stock to Norman Feirstein for services. The shares
      of common stock were recorded at their fair market value on the date of issuance
      of $66,000 ($0.22 per share) and were charged to operations as general and
      administrative expense during the year ended December 31, 2006.





On
      September 28, 2006, the Company issued 40,000 shares of common stock to Benjamin
      Frankel and 40,000 shares of common stock to Norman Feirstein for services.
      The
      shares of common stock were recorded at their fair market value on the date
      of
      issuance of $89,000 ($1.11 per share) and were charged to operations as general
      and administrative expense during the year ended December 31, 2006.





DIRECTOR
      COMPENSATION TABLE




Name
                and Principal Position
            
            Year
            
            Stock
              Awards
              ($)
            
            All
                Other
              Compensation
              ($)(1)(2)(3)
            
            Total
              ($)Andrew
                Pells
            
            
            2007
            
            
            -
            
            
            48,000
            
            
            48,000Sam
                Georges
            
            
            2007
            
            
            -
            
            
            48,000
            
            
            48,000Benjamin
                Frankel - Director
            
            
            2007
            
            
            -
            
            
            8,000
            
            
            4,000Norman
                Feirstein - Director
            
            
            2007
            
            
            -
            
            
            8,000
            
            
            4,000Benjamin
                Frankel - Director
            
            
            2006
            
            
            77,400
            
            
            4,000
            
            
            81,400Norman
                Feirstein - Director
            
            
            2006
            
            
            77,400
            
            
            4,000
            
            
            81,400




45


(1)
            During
                the year ended December 31, 2007, the Company’s Board of Directors met on
                four occasions. Messrs. Frankel, Mr. Feirstein, and Mr. Georges attended
                all four meetings and received $2,000 for each meeting they attended.
                Mr
                Pells attended one meeting and received $2,000 for his attendance
                and
                participation.


(2)
            During
                the year ended December 31, 2007 Messrs.Pells and Georges each received
                options to purchase 10,000 shares of our common stock. The stock
                options
                granted to Messrs Pells and Georges had an estimated value, using
                the
                Black-Scholes Model, of $46,000 and $40,000,
                respectively.


(3)
            During
                the year ended December 31, 2006, the Company’s Board of Directors met on
                two occasions. Mr. Frankel and Mr. Feirstein received $2,000 for
                each
                meeting they attended.




Employment
      Agreements:





Effective
      March 1, 2006, the Company entered in a three-year employment agreement with
      Mitch Francis, its President and Chief Executive Officer, to serve as Chairman
      of the Board of Directors, President and Chief Executive Officer. The agreement
      provides for a base annual salary of $275,000, annual increases of 8% and
      benefits, and annual bonuses subject to the approval of the Board of Directors.
      The agreement also provides that the Company issue to Mr. Francis 500,000 shares
      of restricted common stock within 30 days of March 1, 2006. The shares of common
      stock were issued on March 13, 2006. The shares of common stock are subject
      to a
      prohibition on being traded, encumbered or otherwise transferred, which
      restriction shall lapse in equal annual installments on March 13, 2007, 2008
      and
      2009. Upon the occurrence of a change in control of the Company, as defined,
      Mr.
      Francis will be entitled to, among other compensation, an amount equal to five
      times his annual base salary immediately prior to the change in control event.





On
      September 27, 2007, the Company entered into a written employment agreement
      with
      Kimberly Simon in which she will continue to serve as the Company’s Chief
      Operating Officer.  September 1, 2010, unless sooner terminated in
      accordance with the employment agreement for a term ending. **** Under
      her
      employment agreement, Ms. Simon is entitled to an annual salary of $225,000,
      which will increase by 8% annually on each anniversary of the commencement
      date
      of the employment agreement.  Ms. Simon will be eligible for an annual
      bonus in the discretion of the Company’s board of directors.  In addition
      to her annual salary, the Company has agreed to provide Ms. Simon with an
      automobile and has agreed to provide her with health and long-term care
      insurance and personal tax consultation and preparation of tax returns, as
      well
      as certain other benefits.




In
      conjunction with the agreement the Compensation Committee of the Company’s board
      of directors determined to grant Ms. Simon a ten-year, nonqualified stock option
      to purchase 300,000 shares of our common stock at a price of $7.00 per
      share.  The options will vest in three installments of 100,000 shares each
      on September 1, 2008, 2009 and 2010, subject to Ms. Simon remaining in the
      continuous employ of the Company through such vesting dates.  Upon
      termination of Ms. Simon’s employment agreement for any reason other than
“cause” (as defined), any options not previously vested shall immediately vest
      and be exercisable for a period of one year from the date of
      termination.





Severance
      Agreement:





In
      the
      event of termination of the employment agreement for any reason other than
      for
      cause or by reason of Ms. Simon’s death or permanent disability or pursuant to a
“change of control” (as defined) of the Company, the Company has agreed to
      continue to pay Ms. Simon her annual salary for the remainder of the term of
      the
      employment agreement, subject to offset for any compensation paid to Ms. Simon
      in connection with any subsequent reemployment.  If there is a change of
      control of the Company and Ms. Simon’s employment agreement is terminated for
      any reason other than for cause or by reason of Ms. Simon’s death or permanent
      disability, the Company has agreed to pay her a lump-sum amount equal to five
      times her annual salary under the employment agreement and to continue to
      provide her with certain employee benefits.


46


Long-Term
      Incentive Plans:




2004
      Option Plan:





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





During
      the year ended December 31, 2007, the Company issued options to purchase 507,000
      shares of common stock under the 2004 Option Plan. As of December 31, 2007,
      options to purchase 163,000 shares of common stock were reserved for issuance
      under the 2004 Option Plan. The Company issued 300,000 options under the 2004
      Option Plan in 2006.





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. During 2007, the Company’s board
      of directors granted 10,000 options to purchase our common stock to both Messrs.
      Pells and Georges in conjunction with them becoming directors of Tix
      Corporation. The value of the options granted, as calculated using the Black
      Scholes Model, to Messrs Pells and Georges were $46,000 and $40,000,
      respectively. Prior to the above issuance the Company had not granted any
      options under the Directors’ Plan.




Issuance
      of Non-Plan Stock Options, Warrants and Common Stock to Officers:





Matthew
      Natalizio:





On
      September 10, 2007, in conjunction with his employment agreement, the
      Compensation Committee of the Company’s board of directors granted Mr. Natalizio
      a ten-year, nonqualified stock option to purchase 340,000 shares of our common
      stock at a price of $7.00 per share.  Under the terms of his employment
      40,000 options vested immediately and remaining options will vest in three
      installments of 100,000 shares each on September 10, 2008, 2009 and 2010,
      subject to Mr. Natalizio remaining in the continuous employ of the Company
      through such vesting dates.


47


Kimberly
      Simon:





On
      March
      13, 2006, the Company issued 50,000 shares of common stock to Ms. Simon,
      its Chief Operating Officer, as a bonus for services rendered. The shares of
      common stock were recorded at their fair market value on the date of issuance
      of
      $11,000 ($0.22 per share) and were charged to operations as general and
      administrative expense during the year ended December 31, 2006.





On
      March
      13, 2006, the Company issued 150,000 shares of common stock to Ms. Simon.
      The shares of common stock are subject to pro rata forfeiture over a three-year
      period if Ms. Simon ceases to be employed by the Company. The 150,000 shares
      of
      common stock had a fair market value on the date of issuance of $33,000 ($0.22
      per share), which is being charged to operations as general and administrative
      expense over the three-year period commencing March 13, 2006. At December 31,
      2006, 39,583 shares of common stock had vested and were recorded at their
      approximate fair market value of $8,708, which was charged to operations as
      general and administrative expense during the year ended December 31, 2006.





On
      April
      19, 2006, the Company extended the expiration date of a stock option to purchase
      150,000 shares of common stock held by Ms. Simon. The expiration date was
      extended from June 5, 2006 to June 5, 2009. The fair value of such stock option
      of $49,500, as calculated pursuant to the Black-Scholes option-pricing model,
      was credited to additional paid-in capital and was charged to operations as
      general and administrative expense during the year ended December 31, 2006.





On
      September 28, 2006, the Company issued 100,000 shares of common stock to Ms.
      Simon, as a bonus for services rendered. The shares of common stock were
      recorded at their fair market value on the date of issuance of $111,000 ($1.11
      per share) and were charged to operations as general and administrative expense
      during the year ended December 31, 2006.





On
      January 18, 2006, the Company entered into an agreement with Ms. Simon, its
      Chief Operating Officer, that provides for her to receive a bonus in the form
      of
      a warrant for 100,000 shares of common stock, exercisable for a period of
      five years at $0.36 per share (the fair market value on the date of the
      agreement), that vests only in the event that the gross number of tickets sold
      in 2006 is at least equal to 125% of the gross number of tickets sold in 2005.
      As of June 30, 2006, the Company had determined that such vesting milestone
      had
      been met. Accordingly, the fair value of such warrant of $70,000, calculated
      pursuant to the Black-Scholes option-pricing model, was charged to operations
      as
      general and administrative expense over the remainder of the year ended December
      31, 2006.





Mitch
      Francis:





On
      June
      5, 2001, Mr. Francis exercised a portion of a previously issued warrant to
      purchase 1,538,461 shares of common stock exercisable at $0.13 per share through
      February 2, 2002. Mr. Francis exercised a portion of the warrant and acquired
      923,077 shares of common stock and paid the exercise consideration by canceling
      his $120,000 loan to the Company. At that time, the unexercised portion of
      the
      warrant for 615,384 shares of common stock was extended for an additional two
      years and cashless exercise provisions were added. The exercise price of the
      warrant was approximately equal to the fair market value of the Company's common
      stock on the extension date. On November 26, 2003, the expiration date of this
      warrant was extended from February 2, 2004 to February 2, 2007. The exercise
      price of the warrant was in excess of the fair market value of the Company's
      common stock on November 26, 2003. On September 28, 2006, Mr. Francis exercised
      a portion of the abovementioned warrant and acquired 505,588 shares of common
      stock by offsetting accrued but unpaid compensation of $65,726. On February
      2,
      2007, Mr. Francis exercised (on a cashless basis) the remainder of the
      previously issued warrant to acquire 109,796 shares of common stock at an
      exercise price of $0.13 per share. Accordingly, the aggregate exercise price
      of
      $14,273 was paid through the surrender and cancellation of 3,005 shares with
      a
      fair market value on the date of exercise of $4.75 per share, which resulted
      in
      the issuance of 106,791 shares of common stock.





During
      March 2006, the Company issued 500,000 shares of common stock pursuant to a
      new
      three-year employment agreement with Mr. Francis. The 500,000 shares of common
      stock had a fair market value on the date of issuance of $110,000 ($0.22 per
      share), which is being charged to operations as general and administrative
      expense over the three-year period commencing March 1, 2006. At December 31,
      2006, 138,889 shares of common stock had vested and were recorded at their
      approximate fair market value of $30,556, which was charged to operations as
      general and administrative expense during the year ended December 31, 2006.


48


On
      September 28, 2006, the Company issued 200,000 shares of common stock to Mr.
      Francis, as a bonus for services rendered. The shares of common stock were
      recorded at their fair market value on the date of issuance of $222,000 ($1.11
      per share) and were charged to operations as general and administrative expense
      during the year ended December 31, 2007 and 2006, respectively.





On
      November 6, 2006, the Company issued options to purchase 300,000 shares of
      common stock under the 2004 Option Plan, to its newly-hired director of business
      development, Craig Stein. On each of the first three year anniversary dates
      of
      his employment, as long as Mr. Stein remains an employee of the Company, options
      to acquire 100,000 shares of common stock will be granted to Mr. Stein on each
      of November 6, 2007, November 6, 2008 and November 6, 2009, respectively, with
      per share exercise prices of $2.02, $3.00 and $4.00, respectively. The
      approximate fair value of such options, calculated pursuant to the Black-Scholes
      option-pricing model, was $906,000. The Company will amortize the fair value
      of
      such options over 36 months, and as a result, $302,000 and $50,000 was charged
      to operations as general and administrative expense during the year ended
      December 31, 2007 and 2006, respectively.





A
      summary
      of stock options and warrants issued to officers, directors and employees as
      of
      December 31, 2007 is presented below:





Stock Option and Warrant Value TableNumber of Shares of
                Common Stock
                Underlying
                Stock Options and
                Warrants
              
              
              
              Value of Unexercised
                in-the-Money Stock
                Options
                and Warrants at Fiscal
                Year-End (1)Name
              
              Unvested
              
              Vested
              
              Weighted
                  Average
                  Exercise
                  Price
              
              Unvested
              
              VestedOption Plans:Kimberly
                  Simon
              
              
              300,000
              
              
              
              
              $
              7.00
              
              $
              -
              
              $
              -Craig
                  Stein
              
              
              200,000
              
              
              100,000
              
              
              3.01
              
              
              470,000
              
              
              383,000Employees
              
              
              78,000
              
              
              
              
              
              7.00
              
              
              -Employees
              
              
              
              
              
              500
              
              
              0.39
              
              
              -
              
              
              2,015Non-Plan
                  Stock Options and Warrants:Mitch
                  FrancisWarrants
              
              
              -
              
              
              109,796
              
              
              0.13
              
              
              -
              
              
              628,033Kimberly
                  SimonStock
                  Options
              
              
              -
              
              
              150,000
              
              
              0.15
              
              
              -
              
              
              855,000Warrants
              
              
              -
              
              
              150,000
              
              
              0.38
              
              
              -
              
              
              820,500Matthew
                  NatalizioStock
                  Options
              
              
              300,000
              
              
              40,000
              
              
              7.00
              
              
              -
              
              
              -




49





(1)
      The
      dollar values are calculated by determining the difference between the weighted
      average exercise price of the stock options and warrants and the market price
      for the common stock of $4.42 per share at December 31, 2006.




ITEM
      11.
      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT





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




As
      of
      March 14, 2008, the Company had a total of 31,375,474 shares of common stock
      issued and outstanding, which is the only issued and outstanding voting equity
      security of the Company.





The
      following table sets forth, as of March 14, 2007: (a) the names and addresses
      of
      each beneficial owner of more than five percent (5%) of the Company's common
      stock known to the Company, the number of shares of common stock beneficially
      owned by each such person, and the percent of the Company's common stock so
      owned; and (b) the names and addresses of each director and executive officer,
      the number of shares of common stock beneficially owned, and the percentage
      of
      the Company's common stock so owned, by each such person, and by all directors
      and executive officers of the Company as a group. Each person has sole voting
      and investment power with respect to the shares of common stock, except as
      otherwise indicated. Beneficial ownership consists of a direct interest in
      the
      shares of common stock, except as otherwise indicated.





Name
                and Address
              of Beneficial Owner
            
            Amount and
              Nature of
              Beneficial
              Ownership
            
            Percent of
              Shares of
              Common
              Stock
              Outstanding
              (2)Mitch
                Francis (1)
            
            
            7,555,520
                (3
            )
            
            33.1
            %Kimberly
                Simon (1)
            
            
            1,061,000
                (4
            )
            
            3.9
            %Matthew
                Natalizio (1)
            
            
            340,000
                (9
            )Benjamin
                Frankel (1)
            
            
            450,500
            
            
            2.4
            %Norman
                Feirstein (1)
            
            
            430,000
            
            
            2.3
            %Sam
                Georges (1)
            
            
            20,000
                (9
            )
            
            0.1
            %Andy
                Pells (1)
            
            
            10,000
                (9
            )All
                      directors and executive officers as a group (8
                      persons)
            
            
            9,867,020(5
            )
            
            40.7
            %Rick
                Kraniak (1)
            
            
            969,875(6
            )
            
            5.1
            %Joe
                Marsh (1)
            
            
            4,401,599
                (7
            )
            
            18.8
            %Iqbal
                Ashraf (1)
            
            
            3,693,000
                (8
            )
            
            15.6
            %


50





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




(2) 
      The calculation is based on the number of shares of common stock outstanding
      on
      February 28, 2007, plus, with respect to each named person, the number of shares
      of common stock which the stockholder has the right to acquire upon exercise
      of
      stock options and warrants exercisable within 60 days of February 28,
      2007.




(3)
      Includes 3,752,724 shares of common stock owned by Mr. Francis. Also includes
      2,693,000 shares of common stock owned by Mr. Iqbal Ashraf and 1,000,000 shares
      of common stock issuable upon exercise of warrants held by Mr. Ashraf, for
      which
      voting power has been granted to Mr. Francis. The amount presented also includes
      a warrant to purchase 109,796 of the Company’s common stock. Excludes 194,443
      unvested shares issued to Mr. Francis in March 2006. The balance also excludes
      254,688 shares of common stock owned by Sandra Francis, the wife of Mr. Francis,
      as to which Mr. Francis disclaims beneficial ownership.





(4) 
       Includes 461,000 shares of common stock owned by Ms. Simon and 600,000
      shares of common stock issuable upon exercise of stock options and warrants
      granted to Ms. Simon. Excludes 60,416 unvested shares issued to Ms. Simon in
      March 2006.




(5)  
      Includes 5,012,724 shares of common stock owned by officers and directors and
      1,069,796 shares of common stock issuable upon exercise of stock options and
      warrants granted to officers and directors. Also includes 2,693,000 shares
      of
      common stock owned by Mr. Iqbal Ashraf and 1,000,000 shares of common stock
      issuable upon exercise of warrants held by Mr. Ashraf, for which voting power
      has been granted to Mr. Francis. Excludes 254,860 unvested shares issued in
      March 2006. Also excludes 254,688 shares of common stock owned by Sandra
      Francis, the wife of Mr. Francis, as to which Mr. Francis disclaims beneficial
      ownership.




(6)  
      Includes 769,875 shares of common stock owned by Mr. Kraniak and 200,000 shares
      of common stock issuable upon exercise of warrants granted to Mr. Kraniak.
      Excludes 3,125 unvested shares issued in July 2006.




(7)  
      Includes 1,658,051 shares of common stock owned by Mr. Marsh and 20,000 shares
      of common stock issuable upon exercise of warrants granted to Mr. Marsh.
      Includes shares owned by Magic Arts and Entertainment, a company in which Mr.
      Marsh is a partner. Excludes 3,125 unvested shares issued in July
      2006.




(8)  
      Includes 2,094,000 shares of common stock owned by Mr. Ashraf and 1,000,000
      shares of common stock issuable upon exercise of warrants held by Mr. Ashraf.
      Voting power with respect to 2,000,000 shares of common stock owned by Mr.
      Ashraf and 1,000,000 shares of common stock issuable upon exercise of warrants
      held by Mr. Ashraf has been granted to Mitch Francis.


51


(9)
      Messrs Pells and Georges were each granted options to purchase 10,000 shares
      of
      the Company’s common stock in 2007, as a result of their being appointed
      directors. Mr. Natalizio was granted 340,000 shares as a result of his
      appointment as Chief Financial Officer.





Changes
      in Control:





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





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





ITEM
      12.
      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





During
      2007, Benjamin Frankel, a director of the Company, was a principal in Frankel,
      LoPresti & Co., an accountancy corporation. During 2005 and 2004, Mr.
      Frankel was a principal in the accounting firm of Frankel, Lodgen, Lacher,
      Golditch, Sardi & Howard LLP.





Effective
      March 6, 2006, the Company entered into a one-year agreement with Mr. Frankel’s
      current firm for certain business, accounting and tax advisory services to
      be
      provided by Mr. Frankel, for a monthly retainer fee of $5,000 commencing as
      of
      January 1, 2006. Other services outside the scope of this agreement are invoiced
      separately by Mr. Frankel’s firm. This agreement was approved by the
      disinterested members of the Company’s Board of Directors.





During
      the years ended December 31, 2007, 2006 and 2005, the Company incurred fees
      to
      such accounting firms for accounting and tax services of $53,000, $108,000
      and
      $76,000, respectively. In addition, during the year ended December 31, 2006,
      the
      Company wrote-off the remaining balance of the prepaid accounting fee to Mr.
      Frankel’s former firm at December 31, 2005 of $9,000.





Additional
      information with respect to securities issued to the Company’s officers and
      directors in 2005 and 2006 is provided at “ITEM 10. EXECUTIVE
      COMPENSATION”.





ITEM
      13.
      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.





ITEM
      14.
      PRINCIPAL ACCOUNTANT FEES AND SERVICES





Audit
      and
      Audit Related Fees:





Weinberg
      & Company, P.A. ("Weinberg") was the Company's independent registered public
      accounting firm for the years ended December 31, 2007, 2006 and 2005. Services
      provided to the Company by Weinberg with respect to such periods consisted
      of
      the audits of the Company's consolidated financial statements and limited
      reviews of the condensed consolidated financial statements included in Quarterly
      Reports on Form 10-QSB. Weinberg & Co. also provided audit services with
      respect to our 2007 acquisitions of John’s Tickets and Exhibit Merchandising,
      LLC to the filing of the Company’s Registration Statement on Form SB-2, and
      amendments thereto, during 2006 and 2005. Charges by Weinberg with respect
      to
      these matters aggregated $346,000, $74,000 and $108,000, respectively, for
      the
      years ended December 31, 2007, 2006 and 2005.


52


Tax
      Fees:





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





All
      Other
      Fees:





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





Pre-Approval
      Policies and Procedures:





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




SIGNATURES





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





TIX
                CORPORATION
              (Registrant)Date:
                March 26, 2008
            By:
            /s/
                MITCH FRANCISMitch
                Francis
              Chief
                Executive Officer, President,
              and
                Chairman of theBoard
                of Directors





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





Date:
                March 26, 2008
            By:
            /s/
                MATTHEW NATALIZIOMatthew
                Natalizio
              Chief
                Financial OfficerDate:
                March 26, 2008
            By:
            /s/
                BENJAMIN FRANKELBenjamin
                Frankel
              Director


53




Date:
                March 26, 2008
            By:
            /s/
                NORMAN FEIRSTEINNorman
                Feirstein
              DirectorDate:
                March 26, 2008
            By:
            /s/
                SAM GEORGESSam
                Georges
              DirectorDate:
                March 26, 2008
            By:
            /s/
                ANDREW PELLSAndrew
                Pells
              Director


54


TIX
      CORPORATION AND SUBSIDIARIES





INDEX
      TO
      CONSOLIDATED FINANCIAL STATEMENTS





PAGEReport
                of Independent Registered Public Accounting Firm
            56Consolidated
                Financial Statements:Consolidated
                Balance Sheets as of December 31, 2007 and 2006
            57Consolidated
                Statements of Operations for the Years Ended December 31, 2007
                and 2006
            59Consolidated
                Statements of Stockholders’ Equity for the Years Ended
              December
                31, 2007 and 2006
            60Consolidated
                Statements of Cash Flows for the Years Ended December 31, 2007 and
                2006
            62Notes
                to Consolidated Financial Statements
            65


55





REPORT
          OF
          INDEPENDENT REGISTERED PUBLIC ACOUNTING FIRM
 
 
 The
          Board
          of Directors
 Tix
          Corporation
 
 We
          have
          audited the accompanying consolidated balance sheets of Tix Corporation
          and
          Subsidiaries (the “Company”) as of December 31, 2007 and 2006, and the related
          consolidated statements of operations, stockholders' equity (deficiency)
          and
          cash flows for the years then ended. These consolidated financial statements
          are
          the responsibility of the Company's management. Our responsibility is to
          express
          an opinion on these consolidated financial statements based on our
          audits.
 
 We
          conducted our audits in accordance with standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audits to obtain reasonable assurance about whether the
          consolidated financial statements are free of material misstatement. The
          Company
          is not required to have, nor were we engaged to perform, an audit of its
          internal control over financial reporting. Our audits included consideration
          of
          internal control over financial reporting as a basis for designing audit
          procedures that are appropriate in the circumstances, but not for the purpose
          of
          expressing an opinion on the effectiveness of the Company’s internal control
          over financial reporting. Accordingly, we express no such opinion. An audit
          includes examining, on a test basis, evidence supporting the amounts and
          disclosures in the consolidated financial statements. An audit also includes
          assessing the accounting principles used and significant estimates made
          by
          management, as well as evaluating the overall consolidated financial statement
          presentation. We believe that our audits provide a reasonable basis for
          our
          opinion.
 
 In
          our
          opinion, the consolidated financial statements referred to above present
          fairly,
          in all material respects, the consolidated financial position of Tix Corporation
          and Subsidiaries as of December 31, 2007 and 2006, and the results of their
          operations and their cash flows for the years then ended, in conformity
          with
          accounting principles generally accepted in the United States of
          America.
    
 Weinberg
          & Company, P.A.
 
 Los
          Angeles, California
 March
          20,
          2008


56




TIX
      CORPORATION AND SUBSIDIARIES


CONSOLIDATED
        BALANCE SHEETS
 
 DECEMBER
        31, 2007 AND 2006
 
 ASSETS
 
 2007
              
              2006Current
                  assets:Cash
              
              $
              7,417,000
              
              $
              1,943,000Other
                  receivable
              
              
              345,000
              
              
              —Accounts
                  receivable, net
              
              
              129,000
              
              
              —Inventory
              
              
              3,938,000
              
              
              —Prepaid
                  expenses and other current assets
              
              
              178,000
              
              
              40,000Total
                  current assets
              
              
              12,007,000
              
              
              1,983,000Property
                  and equipment:Office
                  equipment and furniture
              
              
              1,413,000
              
              
              222,000Equipment
                  under capital lease
              
              
              386,000
              
              
              386,000Leasehold
                  improvements
              
              
              313,000
              
              
              261,0002,112,000
              
              
              869,000Less
                  accumulated depreciation and amortization
              
              
              (664,000
              )
              
              (370,000
              )Total
                  property and equipment, net
              
              
              1,448,000
              
              
              499,000Other
                  assets:Intangible
                  assets:Goodwill
              
              
              27,115,000
              
              
              —Intangible
                  assets, net
              
              
              14,524,000
              
              
              83,000Total
                intangible assets
              
              
              41,639,000
              
              
              83,000Deposits
                  and other assets
              
              
              74,000
              
              
              67,000Total
                  other assets
              
              
              41,713,000
              
              
              150,000Total
                  assets
              
              $
              55,168,000
              
              $
              2,632,000
 
 (continued)
  57
  TIX
        CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED
        BALANCE SHEETS (continued)
 
 DECEMBER
        31, 2007 AND 2006
 
 LIABILITIES
        AND STOCKHOLDERS’ EQUITY
 
 2007
              
              2006Current
                  liabilities:Accounts
                  payable
              
              $
              1,945,000
              
              $
              1,684,000Accrued
                liabilities
              
              
              1,082,000
              
              
              202,000Current
                  portion of capital lease obligations
              
              
              45,000
              
              
              53,000Deferred
                  revenue
              
              
              54,000
              
              
              —Total
                  current liabilities
              
              
              3,126,000
              
              
              1,939,000Non-current
                  liabilities:Capital
                  lease obligations, less current portion
              
              
              108,000
              
              
              140,000Deferred
                  rent
              
              
              188,000
              
              
              175,000Total
                  non-current liabilities
              
              
              296,000
              
              
              315,000Stockholders’
                  equity:Preferred
                  stock, $0.01 par value; 500,000 shares authorized;none
                  issued
              
              
              —
              
              
              —Common
                  stock, $0.08 par value; 100,000,000 shares authorized;30,402,325
                  shares and 18,440,305 shares issued and outstandingat
                  December 31, 2007 and 2006, respectively
              
              
              2,432,000
              
              
              1,475,000Additional
                  paid-in capital
              
              
              81,034,000
              
              
              14,278,000Accumulated
                  deficit
              
              
              (31,720,000
              )
              
              (15,375,000
              )Total
                  stockholders’ equity
              
              
              51,746,000
              
              
              378,000$
              55,168,000
              
              $
              2,632,000
  See
        accompanying notes to consolidated financial statements.
  58


TIX
      CORPORATION AND SUBSIDIARIES




CONSOLIDATED
      STATEMENTS OF OPERATIONS




YEARS
      ENDED DECEMBER 31, 2007 AND 2006




2007
              
              2006Revenues
              
              $
              18,567,000
              
              $
              5,388,000Operating
                  expenses:Direct
                  costs of revenues
              
              
              11,672,000
              
              
              2,173,000Selling
                  and marketing expenses, including non-cash equity-based costs of
                  $10,867,000 for the year ended December 31, 2007. During
                  the year ended December 31, 2006 there were no non-cashequity-based
                  costs.
              
              
              13,475,000
              
              
              467,000General
                  and administrative expenses, including non-cash equity-based costs
                  of
                  $3,284,000 and $1,326,000 in 2007 and 2006, respectively
                  (including $682,000 and $658,000 for officers and directors in
                  2007 and
                  2006, respectively).
              
              
              8,117,000
              
              
              3,306,000Depreciation
                  and amortization
              
              
              1,668,000
              
              
              164,000Total
                  costs and expenses
              
              
              34,932,000
              
              
              6,110,000Loss
                  from operations
              
              
              (16,365,000
              )
              
              (722,000
              )Other
                  income (expense):Other
                  income
              
              
              28,000
              
              
              37,000Gain
                  on settlement with lender
              
              
              —
              
              
              1,078,000Gain
                  on settlement of debt
              
              
              —
              
              
              12,000Write-off
                  deferred offering costs
              
              
              
              
              
              (58,000
              )Interest
                  income
              
              
              96,000
              
              
              16,000Interest
                  expense
              
              
              (104,000
              )
              
              (329,000
              )Other
                  income (expense), net
              
              
              20,000
              
              
              756,000Income
                  (loss) from continuing operations
              
              
              (16,345,000
              )
              
              34,000Income
                  from discontinued operations:Income
                  from discontinued operations, primarilynon-cash
                  gain resulting from settlement of debts
              
              
              —
              
              
              5,000Income
                  from discontinued operations
              
              
              —
              
              
              5,000Net
                  income (loss)
              
              $
              (16,345,000
              )
              $
              39,000Net
                  income (loss) per common share - basic and dilutedFrom
                  continuing operations
              
              $
              (0.70
              )
              $
              —$
              (0.70
              )
              $
              —Weighted
                  average common shares outstanding -Basic
              
              
              23,446,349
              
              
              14,886,334Diluted
              
              
              23,446,349
              
              
              15,999,473




See
      accompanying notes to consolidated financial statements.





59




TIX
      CORPORATION AND SUBSIDIARIES




CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY




YEARS
      ENDED DECEMBER 31, 2007 AND 2006




**Common stock**
              ****
              
              ****
              
              ****
              
              ****
              **Total**
              ********
              **Shares**
              ****
              **Amount**
              ****
              **Additional Paid-in Capital**
              ****
              **Deferred**
                  **Compensation**
              ****
              ****
                **Accumulated**
                **Deficit**
              ****
              **Stockholder’s Equity (Deficiency)**






Balance,
                January 1, 2006
            
            
            11,166,621
            
            $
            893,000
            
            $
            12,156,000
            
            $
            (35,000
            )
            $
            (15,414,000
            )
            $
            (2,400,000
            )Issuance
                of common stock upon conversion of convertible debenture
            
            
            93,563
            
            
            8,000
            
            
            18,000
            
            
            —
            
            
            —
            
            
            26,000Issuance
                of common stock to consultants
            
            
            353,750
            
            
            28,000
            
            
            360,000
            
            
            —
            
            
            —
            
            
            388,000Issuance
                of common stock  to directors
            
            
            380,000
            
            
            30,000
            
            
            124,000
            
            
            —
            
            
            —
            
            
            154,000Issuance
                  of common stock to officers
                  and employees
            
            
            758,472
            
            
            61,000
            
            
            517,000
            
            
            —
            
            
            —
            
            
            578,000Issuance
                of common stock to law firm as payment of accrued legal
                fees
            
            
            230,000
            
            
            18,000
            
            
            56,000
            
            
            —
            
            
            —
            
            
            74,000Sale
                of common stock and warrants to private investors, net of offering
                costs
            
            
            4,080,000
            
            
            327,000
            
            
            677,000
            
            
            —
            
            
            —
            
            
            1,004,000Issuance
                of common stock upon exercise of warrants and options
            
            
            1,351,353
            
            
            108,000
            
            
            102,000
            
            
            —
            
            
            —
            
            
            210,000Issuance
                of warrants and options and  extension of options
            
            
            —
            
            
            —
            
            
            170,000
            
            
            —
            
            
            —
            
            
            170,000Issuance
                of common stock for acquisition of Stand-By Golf
            
            
            26,546
            
            
            2,000
            
            
            98,000
            
            
            —
            
            
            —
            
            
            100,000Amortization
                of deferred compensation
            
            
            —
            
            
            —
            
            
            —
            
            
            35,000
            
            
            —
            
            
            35,000Net
                income
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            39,000
            
            
            39,000Balance,
                December 31, 2006
            
            
            18,440,305
            
            
            1,475,000
            
            
            14,278,000
            
            
            —
            
            
            (15,375,000
            )
            
            378,000






Issuance of
                common stock to consultants
            
            
            1,601,924
            
            
            128,000
            
            
            8,764,000
            
            
            —
            
            
            —
            
            
            8,892,000Issuance
                of common stock to officers and employees
            
            
            316,668
            
            
            25,000
            
            
            657,000
            
            
            —
            
            
            —
            
            
            682,000Issuance
                of common stock upon exercise of warrants and options
            
            
            1,161,912
            
            
            93,000
            
            
            136,000
            
            
            —
            
            
            —
            
            
            229,000Issuance
                of common stock for acquisition of AnyEvent
            
            
            137,500
            
            
            11,000
            
            
            539,000
            
            
            —
            
            
            —
            
            
            550,000Issuance
                of common stock for acquisition of Exhibit Merchandising
            
            
            5,000,000
            
            
            400,000
            
            
            34,600,000
            
            
            —
            
            
            —
            
            
            35,000,000Fair
                value of options issued to employees
            
            
            —
            
            
            —
            
            
            1,136,000
            
            
            —
            
            
            —
            
            
            1,136,000Fair
                value of options and warrants issued to consultants
            
            
            —
            
            
            —
            
            
            3,440,000
            
            
            —
            
            
            —
            
            
            3,440,000Sale
                of common stock
            
            
            3,744,016
            
            
            300,000
            
            
            17,484,000
            
            
            —
            
            
            —
            
            
            17,784,000Net
                loss for the period
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (16,345,000
            )
            
            (16,345,000
            )Balance,
                December 31, 2007
            
            
            30,402,325
            
            $
            2,432,000
            
            $
            81,034,000
            
            
            —
            
            $
            (31,720,000
            )
            $
            51,746,000




60




TIX
      CORPORATION AND SUBSIDIARIES




CONSOLIDATED
      STATEMENTS OF CASH FLOWS




YEARS
      ENDED DECEMBER 31, 2007 AND 2006


**Year
                    Ended December 31**2007
                
                2006Cash
                    flows from operating activities:Net
                    income (loss)
                
                $
                (16,345,000
                )
                $
                39,000Adjustments
                    to reconcile net loss to cash provided by (used in)operating
                    activities:Depreciation
                    and amortization
                
                
                294,000
                
                
                124,000Amortization
                    of intangible assets
                
                
                1,375,000
                
                
                2,000Loss
                    on disposal of fixed assets
                
                
                —
                
                
                —Gain
                    on settlement with lender
                
                
                —
                
                
                (1,079,000
                )Gain
                    on settlement of debt
                
                
                —
                
                
                (12,000
                )Fair
                    valued common stock issued for services
                
                
                8,892,000
                
                
                —Fair
                  value of options issued to employees
                
                
                1,136,000
                
                
                767,000Fair
                  value of warrents issued to consultants
                
                
                3,440,000
                
                
                389,000Common
                    stock issued to employees
                
                
                682,000
                
                
                —Gain
                    on settlement of debts - discontinued operations
                
                
                —
                
                
                —Amortization
                    of prepaid accounting fee
                
                
                —
                
                
                —Fair
                    value of vested options and warrants
                
                
                —
                
                
                170,000Amortization
                    of loan discount
                
                
                —
                
                
                65,000Write-off
                    of deferred financing costs
                
                
                —
                
                
                58,000(Increase)
                    decrease in:Accounts
                    receivable
                
                
                (408,000
                )
                
                —Inventory
                
                
                (56,000
                )
                
                —Prepaid
                    expenses and other current assets
                
                
                55,000
                
                
                4,000Deposits
                    and other assets
                
                
                (7,000
                )
                
                (10,000
                )Increase
                    (decrease) in:Accounts
                    payable and accrued expenses
                
                
                1,019,000
                
                
                612,000Deferred
                    revenue
                
                
                53,000
                
                
                —Deferred
                    rent
                
                
                14,000
                
                
                41,000Liabilities
                    related to discontinued operations
                
                
                —
                
                
                (1,000
                )Net
                    cash provided by (used in) operating activities
                
                
                144,000
                
                
                1,169,000Cash
                    flows from investing activities:Purchase
                    of Domain Names
                
                
                (132,000
                )
                
                —Purchases
                    of property and equipment
                
                
                (678,000
                )
                
                (41,000
                )Purchase
                    of Exhibit Merchandising
                
                
                (11,436,000
                )
                
                —Purchase
                    of ticket inventory from AnyEvent
                
                
                (96,000
                )
                
                —Acquisition
                    of AnyEvent
                
                
                (300,000
                )
                
                —Net
                    cash used in investing activities
                
                
                (12,642,000
                )
                
                (41,000
                )Cash
                    flows from financing activities:Payments
                    on notes payable
                
                
                —
                
                
                (132,000
                )Proceeds
                    from note payable, stockholder
                
                
                2,000,000
                
                
                —Repayment
                    of note payable, stockholder
                
                
                (2,000,000
                )
                
                —Proceeds
                    from common stock subscription
                
                
                17,784,000
                
                
                —Payments
                    on capital lease obligations
                
                
                (41,000
                )
                
                (78,000
                )Payments
                    on convertible debentures
                
                
                —
                
                
                (505,000
                )Net
                    proceeds from sale of common stock and warrants
                
                
                —
                
                
                1,003,000Net
                    proceeds from exercise of options and warrants
                
                
                229,000
                
                
                211,000Net
                    proceeds from convertible debenture
                
                
                —
                
                
                —Net
                    cash provided by financing activities
                
                
                17,972,000
                
                
                499,000Change
                    in Cash:Net
                    increase
                
                
                5,474,000
                
                
                1,627,000Balance
                    at beginning of period
                
                
                1,943,000
                
                
                316,000Balance
                    at end of period
                
                $
                7,417,000
                
                $
                1,943,000
   
 61




2007
              
              2006Supplemental
                  disclosures of cash flow information:Cash
                  paid for -Income
                  taxes
              
              
              —
              
              $
              1,000Interest
              
              $
              104,000
              
              $
              154,000Non-cash
                  investing and financing activities:Issuance
                  of common stock for accounts payable
              
              $
              —
              
              $
              74,000Issuance
                  of common stock upon conversion of convertible
                  debenture
              
              
              —
              
              
              25,000Issuance
                  of common stock valued at $100,000 in conjunction with acquisition of
                  Stand-By Golf, allocated to prepaid assets and intangible
                  assets
              
              
              —
              
              
              100,000Issuance
                  of common stock valued at $550,000 in conjunction with acquisition of
                  AnyEvent, allocated to fixed assets and intangible
                  assets
              
              
              550,000
              
              
              —Issuance
                  of common stock valued at $35.0 million in conjunction with
                  acquisition of Exhibit Merchandising allocated to inventory, fixed
                  assets
                  and intangible assets
              
              
              35,000,000
              
              
              —




See
      accompanying notes to consolidated financial statements.




62




TIX
      CORPORATION AND SUBSIDIARIES





NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS





YEARS
      ENDED DECEMBER 31, 2007 AND 2006





**1.** **** **Organization
      and Basis of Presentation**





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




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




**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 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.”




63




**Live
      Entertainment**




In
      December 2007, the Company announced that it had entered into letters of intent
      to acquire two live theatrical and concert production companies; Magic Arts
      & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace). As
      part of the letters of intent the managements’ of Magic and NewSpace would
      manage the operations of their respective company’ for the benefit of Tix
      Corporation from January 2, 2008 until a transaction 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 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. It is the Company’s intent 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.




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.




**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 does not have accounts receivable or 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, 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.





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.


64





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.


Inventory:


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





Property
      and Equipment:





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




Stock-Based
          Compensation:
 
 The
          Company periodically issues stock options and warrants to employees and
          non-employees in non-capital raising transactions for services and for
          financing
          costs. The Company accounts for stock option and warrant grants issued
          and
          vesting to employees 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.
  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:
 2007
                    
                    
                    2006Risk
                        free rate of return
                    
                    
                    4
                    %
                    
                    4
                    %Option
                        lives in years
                    
                    
                    6
                    
                    
                    6Annual
                        volatility of stock price
                    
                    
                    112.5
                    %
                    
                    112.5
                    %Dividend
                        yield
                    
                    
                    0
                    %
                    
                    0
                    %
 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
            managements assessment at December 31, 2007 or
            2006.


65







Income
      Taxes:





Current
      income tax expense is the amount of income taxes expected to be payable for
      the
      current year. A deferred income tax asset or liability is established for the
      expected future consequences of temporary differences in the financial reporting
      and tax 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.





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 December 31, 2007 and 2006.





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.


66





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 year
      ended December 31, 2006, but were not included in the calculation of loss per
      share for the year ended December 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 year ended
      December 31, 2007. At December 31, 2007 and 2006, potentially dilutive
      securities consisted of outstanding warrants and stock options to acquire an
      aggregate of 5,261,000 shares and 3,281,000 shares, respectively.





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






67





Comprehensive
      Income (Loss):





The
      Company has adopted the provisions of Statement of Financial Accounting
      Standards No. 130, “Reporting Comprehensive Income” (“SFAS No. 130”).
      SFAS No. 130 established standards for the reporting and display of
      comprehensive income, its components and accumulated balances in a full set
      of
      general purpose financial statements. SFAS No. 130 defines comprehensive
      income (loss) to include all changes in equity except those resulting from
      investments by owners and distributions to owners, including adjustments to
      minimum pension liabilities, accumulated foreign currency translation, and
      unrealized gains or losses on marketable securities. The Company did not have
      items of comprehensive income (loss) for the years ended December 31, 2007
      and
      2006.




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 year’s ended December 31, 2007 and 2006,
      advertising costs were $823,000 and $426,000, 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 managements assessment at December 31, 2007
      or 2006.





68





Reclassifications:





During
      2006 the Company reclassified certain components of its stockholders' equity
      section to reflect the elimination of deferred compensation arising from
      unvested share-based compensation pursuant to the requirements of Staff
      Accounting Bulletin No. 107, regarding Statement of Financial Accounting
      Standards No. 123(R), “Share-Based Payment.” This deferred compensation was
      previously recorded as an increase to additional paid-in capital with a
      corresponding reduction to stockholders' equity for such deferred compensation.
      This reclassification has no effect on net income or total stockholders' equity
      as previously reported. The Company will record an increase to additional
      paid-in capital as the share-based payments vest.




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.
 
 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.


69





**3.** **** **Gain
      on Settlement of Lender**




From
      2004
      through 2006 we entered into a series of agreements with Finova, which both
      extended and amended the original terms of the debt agreements. On
      September 13, 2006, the Company repaid in full its obligation to the lender
      of
      $1,180,000 (including accrued interest of $297,632) by making a final cash
      payment of $102,000. As a result, the Company recognized a non-cash gain on
      settlement of debt of $1,078,000 ($0.07 per basic and fully diluted common
      share
      for the year ended December 31, 2006), which has been presented as other income
      in the consolidated statement of operations. At December 31, 2006, the Company
      had no continuing financial obligations of any kind to Finova or Steamboat.
      There were no early termination or prepayment penalties incurred by the Company
      in conjunction with this transaction.





**4.
      Acquisitions**





During
      the year ended December 31, 2007 the Company acquired John’s Tickets, LLC and
      Exhibit Merchandising, LLC.





Acquisition
      of Exhibit Merchandising





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





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




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


70





The
      acquisition of Exhibit Merchandising 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 $46.6 million purchase price was allocated on a preliminary basis as
      follows, based upon the fair value of the acquired assets, as determined by
      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:
            
            $
            4,597,000Intangible
                assets:Licensing
                Contracts
            
            
            12,202,000Employment
                Agreements
            
            
            2,538,000Miscellaneous
            
            
            118,000Goodwill
            
            
            27,115,000Purchase
                price
            
            $
            46,570,000




71


Acquisition
      of John's Tickets, LLC





Effective
      March 14, 2007, the Company entered into an Asset Purchase Agreement (the
“Agreement”) with John’s Tickets, LLC, an Ohio limited liability company dba
      AnyEvent Tickets (“AnyEvent”). AnyEvent is a national event ticket broker
      located in Las Vegas, Nevada that sells tickets for sporting events, concerts,
      tours and theater. Pursuant to the Agreement, the Company purchased the domain
      name “http://anyevent.com”, the contents of the website “http://anyevent.com”,
      the inventory of sporting events, concerts and tours, and theatre tickets
      outstanding as of the date of the Agreement, the phone number 1-800-ANYEVENT,
      and all existing contracts by and between AnyEvent and other existing box
      offices, theatres and brokers, pursuant to which AnyEvent acquires its ticket
      inventory.





In
      connection with this transaction, effective March 14, 2007, the Company entered
      into an employment agreement with John Pirample, sole member of AnyEvent,
      pursuant to which Mr. Pirample agreed to provide his exclusive services to
      the
      Company as its Premium Ticket Manager through February 28, 2010





In
      consideration for the assets purchased under the Agreement, the Company paid
      $300,000 in cash and issued 137,500 shares of restricted common stock valued
      at
      $4.00 per share (aggregate value $550,000), which approximated market value
      on
      the date of issuance, for total purchase consideration of $850,000.
      Additionally, the Company paid $96,324 for the actual costs of the ticket
      inventory based on a post-closing audit.




The
      acquisition of AnyEvent has been accounted for as a purchase in accordance
      with
      SFAS No. 141, “Business Combinations”, and the operations of the two companies
      have been consolidated commencing with the closing of the transaction. The
      $850,000 purchase price was allocated on a preliminary basis as follows, based
      upon the fair value of the acquired assets, as determined by an independent
      valuation firm:





Tangible
                assets:Office
                equipment and furniture
            
            $
            25,000Intangible
                assets:Customer
                relationships
            
            
            550,000Contract
                commitments
            
            
            100,000Marketing
                related
            
            
            75,000Technology
                based
            
            
            100,000Purchase
                price
            
            $
            850,000




**Allocation
      of Purchase Price**




The
        value
        of the purchase price allocated to the intangible and fixed assets of John's
        Tickets, LLC and Exhibit Merchandising, LLC were based upon the appraisals
        performed by outside third-party qualified appraisal firms. The valuation
        of the
        purchase price allocated to the assets of John's Tickets was performed by
        Palisades Capital Group, LLC; while the valuation of the tangible and intangible
        assets of Exhibit Merchandising, LLC was performed by Gemini Valuation Services,
        LLC a qualified appraisal firm.
  Goodwill
        represents the excess of the purchase price of an acquired company over the
        fair
        value of the identifiable assets acquired and liabilities assumed. The
        provisions of SFAS No. 142 state that goodwill of a reporting unit must be
        tested for impairment on an annual basis or at any other time during the
        year if
        events occur or circumstances change that would indicate that it is more
        likely
        than not that the fair value of the reporting unit has been reduced below
        its
        carrying amount.
 Circumstances
          that could trigger an impairment test include; a significant adverse change
          in
          the business climate or legal factors; an adverse action or assessment
          by a regulator; unanticipated competition; the loss of key personnel; the
          likelihood that a reporting unit or significant portion of a reporting unit
          will
          be sold or otherwise disposed of; the results of testing for recoverability
          of a
          significant asset group within a reporting unit, and the recognition
          of a goodwill impairment loss in the financial statements of a subsidiary
          that
          is a component of a reporting unit. The Company plans to complete
          the first impairment review of Exhibit Merchandising at mid-year 2008.
          There are
          no indicators of impairment at December 31, 2007.
  The
            unaudited pro forma condensed consolidated statement of operations for
            the years
            ended December 31, 2007 and 2006 presented below gives effect to the
            acquisitions as if the transaction had occurred at the beginning of such
            period
            and includes certain adjustments that are directly attributable to the
            transaction, which are expected to have a continuing impact on the
            Company.
  Pro forma data:
  **Pro
                      Forma**
                  
                  **Pro
                      Forma****(Unaudited)**
                  
                  **(Unaudited)****Year
                      Ended**
                  
                  **Year
                      Ended****December
                      31,**
                  
                  **December
                      31,****2007**
                  
                  **2006**Revenues
                  
                  $
                  24,192,000
                  
                  $
                  20,974,000Cost
                      of revenues
                  
                  
                  14,836,000
                  
                  
                  12,753,000Gross
                      profit
                  
                  
                  9,356,000
                  
                  
                  8,221,000Operating
                      expenses
                  
                  
                  26,087,000
                  
                  
                  10,191,000Other
                      income
                  
                  
                  29,000
                  
                  
                  725,000Net
                      loss
                  
                  $
                  (16,702,000
                  )
                  $
                  (1,245,000
                  )Proforma
                      net loss per weighted average share, basic and diluted
                  
                  $
                  (0.63
                  )
                  $
                  (0.06
                  )




72




**5.
      Intangible Assets**





The
      following table summarizes the original cost, the related accumulated
      amortization, and the net carrying amounts for the Company’s intangible assets
      at December 31, 2007.




Estimated
            
            Original
            
            Accumulated
            
            Net CarryingUseful Lives
            
            Cost
            
            Amortization
            
            AmountMarketing
                Based
            
            
            3-6
                years
            
            $
            12,277,000
            
            $
            823,000
            
            $
            11,454,000Contract
                commitments
            
            
            3
                years
            
            
            2,780,000
            
            
            358,000
            
            
            2,422,000Customer
                relationships
            
            
            3
                years
            
            
            612,000
            
            
            168,000
            
            
            444,000Technology
                Based
            
            
            3
                years
            
            
            100,000
            
            
            26,000
            
            
            74,000Intellectual
                property (e.g. domain names)
            
            
            5
                years
            
            
            130,000
            
            
            —
            
            
            130,000Goodwill
            
            
            indefinite
            
            
            27,115,000
            
            
            —
            
            
            27,115,000Total
            
            
            
            
            $
            43,014,000
            
            $
            1,375,000
            
            $
            41,639,000





Total
      amortization expense related to intangible assets in 2007and 2006 was $1,375,000
      and $2,000, respectively. Total estimated amortization expense with respect
      to
      intangible assets for 2008 though 2012 is as follows:


73





Years
                Ending December 31,2008
            
            $
            3,209,0002009
            
            
            3,215,0002010
            
            
            2,743,0002011
            
            
            2,060,0002012
            
            
            2,060,000Beyond
                2012
            
            
            1,237,000Total
            
            $
            14,524,000





**6.** **** **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 December 31, 2007, monthly
      payments under these leases aggregated $5,000. The leases expire at various
      dates through 2012.





At
      December 31, 2007 and 2006, property and equipment included assets under capital
      leases of $386,000, less accumulated amortization of $237,000 and $162,000,
      respectively.




Minimum
      future payments under capital lease obligations are as follows:




Years
                Ending December 31,2008
            
            $
            62,0002009
            
            
            58,0002010
            
            
            61,0002011
            
            
            3,0002012
            
            
            2,000Total
                payments
            
            
            186,000Less:
                amount representing interest
            
            
            (33,000
            )Present
                value of minimum lease payments
            
            
            153,000Less:
                current portion
            
            
            (45,000
            )Non-current
                portion
            
            $
            108,000









74




**7.** **** **Related
      Party Transactions**





Note
      Payable, Stockholder





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


75


Member
      of
      the Board of Directors:





During
      2007 and 2006, Benjamin Frankel, a director of the Company, was a principal
      in
      Frankel, LoPresti & Co., an accountancy corporation. Effective March 6,
      2006, the Company entered into a one-year agreement with Mr. Frankel’s current
      firm for certain business, accounting and tax advisory services. This agreement
      was approved by the Company’s Board of Directors. This agreement was terminated
      in October 2006. For the years ended December 31, 2007
      and 2006 we paid Mr. Frankel or his firm for accounting and tax
      services $53,000 and $108,000.





During
      the years ended December 31, 2007 and 2006, the Company incurred fees to
      such accounting firms for accounting and tax services of $53,000 and $108,000
      respectively. In addition, during the year ended December 31, 2006, the Company
      wrote-off the remaining balance of the prepaid accounting fee to Mr. Frankel’s
      former firm at December 31, 2005 of $9,000.




**8.** **** **Income
      Taxes**





At
      December 31, 2007, the Company had Federal net operating loss carryforwards
      of
      approximately $26.3 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 such, the
      Company recorded a 100% valuation allowance against its net deferred tax assets
      as of December 31, 2007 and 2006.





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




December
                31,2007
            
            2006Deferred
                tax assetsNet
                operating loss carryforward
            
            $
            9,190,000
            
            $
            3,500,000Goodwill
            
            
            9,174,000
            
            
            -Other
              Assets
            
            
            93,000
            
            
            -Less:
                Valuation allowance
            
            
            (18,457,000
            )
            
            (3,500,000
            )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
      December 31, 2007 and 2006. The provision for income taxes using the statutory
      federal tax rate as compared to the Company’s effective tax rate is summarized
      as follows:


76





Years Ended December 31,2007
            
            2006Tax
                benefit at statutory rate
            
            
            (35
            )%
            
            (35
            )%Adjustments
                to change in valuation allowance
            
            
            35
            
            
            35-
            
            
            -





Effective
      January 1, 2007, the Company adopted Financial Accounting Standards Board
      Interpretation No. 48, “Accounting for Uncertainty in Income Taxes (“FIN 48”) an
      interpretation of FASB Statement No. 109,
      Accounting for Income Taxes.” The Interpretation addresses the determination of
      whether tax benefits claimed or expected to be claimed on a tax return should
      be
      recorded in the financial statements. Under FIN 48, the Company may recognize
      the tax benefit from an uncertain tax position only if it is more likely than
      not that the tax position will be sustained on examination by the taxing
      authorities, based on the technical merits of the position. The tax benefits
      recognized in the financial statements from such a position should be measured
      based on the largest benefit that has a greater than fifty percent likelihood
      of
      being realized upon ultimate settlement. FIN 48 also provides guidance on
      de-recognition, classification, interest and penalties on income taxes,
      accounting in interim periods and requires increased disclosures. At the date
      of
      adoption, and as of December 31, 2007, the Company does not have a liability
      for
      unrecognized tax benefits.




The
      Company files income tax returns in the U.S. federal jurisdiction and various
      states. The Company is subject to U.S. federal or state income tax examinations
      by tax authorities for five years after 2002.




During
      the periods open to examination, the Company has net operating loss and tax
      credit carry forwards for U.S. federal and state tax purposes that have
      attributes from closed periods. Since these NOLs and tax credit carry forwards
      may be utilized in future periods, they remain subject to
      examination.




The
      Company’s policy is to record interest and penalties on uncertain tax provisions
      as income tax expense. As of December 31, 2007, the Company has no accrued
      interest or penalties related to uncertain tax positions.





**9.
      Equity-Based Transactions:**




Year
      Ended December 31, 2007:




Service
      Providers and Vendors:





The
      Company from time to time issues its common stock, options and warrants as
      non-cash compensation for services rendered which are valued at the closing
      stock price on the date of grant and are recorded in marketing and general
      administrative expenses commensurate with the services provided. Additionally
      these shares are often issued in conjunction with an agreement that require
      the
      service provider to assist the Company for a period of two to four years to
      obtain discount and premium ticket opportunities and assist us in obtaining
      in
      strategic alliances; however, as success is not assured in these type of
      arrangements there are no performance requirements included, therefore the
      entire value of the contract is expensed at the time of the stock issuance.
      During the years ended December 31, 2007 and 2006 the Company incurred $6.1
      million and $389,000 of consulting expense as a result of the issuance of 1.1
      million and 353,750 shares of its common stock, respectively. The fair market
      value of the shares issued during the year ended December 31, 2007 was between
      $3.75 and $7.20 per share at the time the stock was issued. The fair value
      of
      the shares issued during the year ended December 31, 2006 was between $0.22
      and
      $2.57.




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




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




Related
      Parties and Employees




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





During
      March 2006, the Company issued 500,000 shares of common stock pursuant to a
      new
      three-year employment agreement with its President and Chief Executive Officer.
      The 500,000 shares of common stock had a fair market value on the date of
      issuance of $110,000 ($0.22 per share) and are being charged to operations
      as
      general and administrative expense over the three-year period commencing March
      1, 2006. At December 31, 2007, 166,668 shares of common stock had vested and
      were recorded at their approximate fair market value of $37,000, which was
      charged to operations as general and administrative expense during the year
      ended December 31, 2007.




Private
      Placement





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


77


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





Year
      Ended December 31, 2006:





During
      the year ended December 31, 2006, the Company issued 380,000 shares of common
      stock to directors valued at $154,800 as follows:




On
      March
      13, 2006, the Company issued a total of 300,000 shares of common stock to its
      two non-officer directors for services, consisting of 150,000 shares to Benjamin
      Frankel and 150,000 shares to Norman Feirstein. The shares of common stock
      were
      recorded at their fair market value on the date of issuance of $66,000 ($0.22
      per share) and were charged to operations as general and administrative expense
      during the year ended December 31, 2006.





On
      September 28, 2006, the Company issued a total of 80,000 shares of common stock
      to its two non-officer directors for services, consisting of 40,000 shares
      to
      Benjamin Frankel and 40,000 shares to Norman Feirstein. The shares of common
      stock were recorded at their fair market value on the date of issuance of
      $88,800 ($1.11 per share) and were charged to operations as general and
      administrative expense during the year ended December 31, 2006.





During
      the year ended December 31, 2006, the Company issued 758,472 shares of common
      stock to officers and employees valued at $577,364 as follows:





On
      March
      13, 2006, the Company issued 50,000 shares of common stock to Kimberly Simon,
      its Chief Operating Officer, as a bonus for services rendered. The shares of
      common stock were recorded at their fair market value on the date of issuance
      of
      $11,000 ($0.22 per share) and were charged to operations as general and
      administrative expense during the year ended December 31, 2006.





On
      March
      13, 2006, the Company issued 150,000 shares of common stock to Kimberly Simon,
      its Chief Operating Officer. The shares of common stock are subject to pro
      rata
      forfeiture over a three-year period if Ms. Simon ceases to be employed by the
      Company. The 150,000 shares of common stock had a fair market value on the
      date
      of issuance of $33,000 ($0.22 per share) and are being charged to operations
      as
      general and administrative expense over the three-year period commencing March
      13, 2006. At December 31, 2006, 39,583 shares of common stock had vested and
      were recorded at their approximate fair market value of $8,708, which was
      charged to operations as general and administrative expense during the year
      ended December 31, 2006.





During
      March 2006, the Company issued 500,000 shares of common stock pursuant to a
      new
      three-year employment agreement with its President and Chief Executive Officer.
      The 500,000 shares of common stock had a fair market value on the date of
      issuance of $110,000 ($0.22 per share) and are being charged to operations
      as
      general and administrative expense over the three-year period commencing March
      1, 2006. At December 31, 2006, 138,889 shares of common stock had vested and
      were recorded at their approximate fair market value of $30,556, which was
      charged to operations as general and administrative expense during the year
      ended December 31, 2006.





On
      September 28, 2006, the Company issued 200,000 shares of common stock to Mitch
      Francis, its President and Chief Executive Officer, as a bonus for services
      rendered. The shares of common stock were recorded at their fair market value
      on
      the date of issuance of $222,000 ($1.11 per share) and were charged to
      operations as general and administrative expense during the year ended December
      31, 2006.


78


On
      September 28, 2006, the Company issued 100,000 shares of common stock to
      Kimberly Simon, its Chief Operating Officer, as a bonus for services rendered.
      The shares of common stock were recorded at their fair market value on the
      date
      of issuance of $111,000 ($1.11 per share) and were charged to operations as
      general and administrative expense during the year ended December 31, 2006.





During
      the year ended December 31, 2006, the Company issued a total of 230,000 shares
      of common stock to its non-officer employees for services rendered. The shares
      of common stock were recorded at their fair market value on the date of issuance
      of $194,100 (based upon prices ranging from $0.22 per share to $3.39 per share)
      and were charged to operations as general and administrative expense during
      the
      year ended December 31, 2006.




On
      September 28, 2006, Mitch Francis, the Company’s President and Chief Executive
      Officer, exercised a portion of a previously issued warrant to acquire 615,384
      shares of common stock at an exercise price of $0.13 per share. Pursuant to
      such
      warrant, Mr. Francis acquired 505,588 shares of common stock by offsetting
      accrued but unpaid compensation of $65,726.





During
      the year ended December 31, 2006, the Company issued options and warrants to
      employees that resulted in aggregate compensation of $169,833 as
      follows:





On
      April
      19, 2006, the Company extended the expiration date of a stock option to purchase
      150,000 shares of common stock held by Kimberly Simon, its Chief Operating
      Officer. The expiration date was extended from June 5, 2006 to June 5, 2009.
      The
      fair value of such stock option modification of $49,500, as calculated pursuant
      to the Black-Scholes option-pricing model, was credited to additional paid-in
      capital and was charged to operations as general and administrative expense
      during the year ended December 31, 2006.





On
      January 18, 2006, the Company entered into an agreement with Kimberly Simon,
      its
      Chief Operating Officer, that provides for her to receive a bonus in the form
      of
      a warrant for 100,000 shares of common stock, exercisable for a period of five
      years at $0.36 per share (the fair market value on the date of the agreement),
      that vests only in the event that the gross number of tickets sold in 2006
      is at
      least equal to 125% of the gross number of tickets sold in 2005. As of June
      30,
      2006, the Company had determined that such vesting milestone had been met.
      Accordingly, the fair value of such warrant of $70,000, calculated pursuant
      to
      the Black-Scholes option-pricing model, was charged to operations as general
      and
      administrative expense during the remainder of the year ended December 31,
      2006.





On
      November 6, 2006, the Company issued options to purchase 300,000 shares of
      common stock under the 2004 Option Plan, to its newly-hired director of business
      development, Craig Stein. On each of the first three year anniversary dates
      of
      his employment, as long as Mr. Stein remains an employee of the Company, options
      to acquire 100,000 shares of common stock will be granted to Mr. Stein on each
      of November 6, 2007, November 6, 2008 and November 6, 2009, respectively, with
      per share exercise prices of $2.02, $3.00 and $4.00, respectively. The
      approximate fair value of such options, calculated pursuant to the Black-Scholes
      option-pricing model, was $906,000. The Company will amortize the fair value
      of
      such options over 36 months, and as a result, $50,333 was charged to operations
      as general and administrative expense during the year ended December 31, 2006.


79
 **10.**  **Issuance
        of Convertible Debentures and Standby Equity Distribution
        Agreement**
 
 Issuance
        of Convertible Debentures to Advantage Capital Development Corp.:
 
 On
        December 7, 2004, the Company closed a financing transaction in which it
        sold 5%
        secured convertible debentures with an aggregate face value of $530,000
        (collectively, the “Debentures”) to Advantage Capital Development Corp.
        (“Advantage”). The Company issued a Debenture with a face value of $250,000 upon
        closing (“Debenture No. 1”) and received net proceeds of $200,000. The Company
        issued another Debenture with a face value of $280,000 on January 6, 2005
        (“Debenture No. 2”) and received net proceeds of $239,300. The Debentures were
        originally scheduled to mature on March 7, 2006. Based on the maturity date
        of
        the Debentures, the Debentures were classified in the Company’s balance sheet as
        current liabilities at December 31, 2005.
 
 Interest
        on the Debentures was originally due at the maturity date was paid monthly
        in
        cash (see below). The Debentures were secured by all of the assets and property
        of the Company. At the option of the holder, the Debentures were convertible
        from time to time after nine months from the date of closing into the Company’s
        common stock at a price per share of either (a) an amount equal to 120% of
        the
        volume weighted average price of the common stock as listed on the National
        Association of Securities Dealers, Inc.’s Over-The-Counter Bulletin Board, as
        quoted by Bloomberg, L.P. on the closing date or (b) an amount equal to 80%
        of
        the average volume weighted average price of the Company’s common stock, as
        quoted by Bloomberg, L.P. for the 5 trading days immediately preceding the
        conversion date. Notwithstanding the foregoing, at no time could the conversion
        price be less than $0.25 per share. The Company had an option to redeem all
        or a
        portion of the outstanding Debentures at a redemption price of 120% of the
        amount redeemed plus accrued interest.
 
 On
        November 4, 2004, the Company issued to Advantage a warrant to purchase 100,000
        shares of common stock exercisable at $0.25 per share through November 4,
        2007,
        which was determined to have a fair value, calculated pursuant to the
        Black-Scholes option-pricing model, of $36,000. On July 26, 2006 and August
        28,
        2006, Advantage exercised a portion of such warrant to purchase 80,000 shares
        of
        common stock upon payment to the Company of $20,000. On October 18, 2006,
        Advantage exercised the remaining portion of the warrant to purchase 20,000
        shares of common stock upon payment to the Company of $5,000.
 
 As
        described below, the Company had the right to determine the form of payment
        (cash or common stock) for any liquidated damages that the Company might
        be
        required to pay to Advantage as a result of its not fulfilling its registration
        statement requirements with the Securities and Exchange Commission (“SEC”) with
        respect to the shares of common stock underlying the warrant.
 
 The
        Debentures were convertible into equity based on their face amount, which
        resulted in a beneficial conversion feature with a fair value of $62,500
        for
        Debenture No. 1 and $70,000 for Debenture No. 2. The aggregate value of the
        warrant of $36,000, the value of the beneficial conversion features of $62,500
        and $70,000, and the aggregate related financing costs of $90,700 paid by
        the
        Company to the lender were recorded as a discount to the face value of the
        Debentures, and were charged to operations as interest expense over the term
        of
        the Debentures through March 31, 2006.
 
 On
        February 27, 2006, the Company entered into a settlement agreement (the
“Agreement”) with Advantage to modify the Securities Purchase Agreement, the
        Security Agreement, the Warrant, the Debentures, the Escrow Agreement and
        the
        Investor Registration Rights Agreement, each executed on November 4, 2004,
        and
        the Amendments dated December 2004, January 2005 and February 2005, to satisfy
        the outstanding amount due in Liquidated Damages pursuant to the Company's
        late
        filing and effectiveness of its Registration Statement as set forth in the
        Investor Registration Rights Agreement. For the year ended December 31, 2005,
        the Company recorded Liquidated Damages of $79,500, which were included in
        interest expense in the Company’s consolidated statement of operations.
  80
 In
        accordance with the Agreement, the Company agreed to honor the $25,000
        conversion notice previously submitted by Advantage, issue such conversion
        shares and reduce the balance on the Debentures accordingly. As a result,
        during
        February 2006, the Company issued 93,563 shares of common stock to Advantage
        with a fair market value of $25,000 based on a conversion price of $0.2672
        per
        share.
 
 The
        Company agreed to pay interest on the Debenture's outstanding balance monthly
        and to repay one-third of the remaining loan balance plus the redemption
        premium
        each on April 1, 2006, June 1, 2006, and August 1, 2006 ($505,000 plus the
        20%
        redemption premium of $101,000, for a total of $606,000). On March 29, 2006,
        the
        Company paid the installment due on April 1, 2006 of $202,000, which consisted
        of a principal payment of $168,000 and a redemption premium of $34,000. On
        May
        30, 2006, the Company paid the installment due on June 1, 2006 of $202,000,
        which consisted of a principal payment of $168,000 and a redemption premium
        of
        $34,000. On July 1, 2006, the Company paid the final installment of $202,000
        due
        on August 1, 2006, which consisted of a principal payment of $168,000 and
        a
        redemption premium of $34,.000.
 
 The
        Company recognized the redemption premium as additional interest expense
        as the
        respective installments were paid. As a result of the payment of the final
        installment on July 1, 2006, the Company has fully complied with the terms
        of
        the Agreement.
  Agreement
        with Knightsbridge Holdings, LLC:
 
 On
        January 6, 2005, pursuant to an agreement dated as of August 31, 2004 and
        as a
        result of the execution of the Standby Equity Distribution Agreement and
        the
        completion of the issuance of the Debentures, the Company issued 448,000
        shares
        of common stock to Knightsbridge Holdings, LLC ("Knightsbridge") as a referral
        fee. The Company was obligated to file a registration statement to cover
        200% of
        the shares so issued. The agreement with Knightsbridge was for an initial
        term
        through February 28, 2005, and continued thereafter on a month-to-month basis,
        but the Company did not have the right to terminate the agreement until such
        time as it had fulfilled all of its obligations under its agreement with
        Advantage. The Company also agreed to pay Knightsbridge a monthly consulting
        fee
        of $2,500. The fair market value of the shares of $201,600 ($0.45 per share)
        was
        recorded as a discount to the face value of the Debentures on January 6,
        2005,
        and was charged to operations as interest expense over the remaining term
        of the
        Debentures through March 31, 2006.
 
 81
 Effective
        July 30, 2006, the Company terminated its agreement with Knightsbridge, as
        the
        Company had fulfilled all of its obligations under its agreement with
        Advantage.
  Subsequent
        to July 30, 2006, the Company has no continuing financial obligations to
        Knightsbridge except that, for a period of two years thereafter, should the
        Company complete a financing transaction through a source introduced, directly
        or indirectly, by Knightsbridge, Knightsbridge will be entitled to receive
        a
        referral fee for debt financings ranging from 1.0% to 2.0%, and for equity
        financings ranging from 1.5% to 4.0%; and with respect to a merger or
        acquisition transaction, Knightsbridge will be entitled to receive 5.0% of
        any
        securities issued by the Company and a fee ranging from 3.0% to 5.0% of the
        defined transaction value.
 
 Registration
        Rights:
 
 The
        Company was obligated to register the shares of common stock referred to
        above
        (the "Registrable Securities").
 
 The
        Company was originally obligated to prepare and file, no later than 45 days
        from
        November 4, 2004 (the "Scheduled Filing Deadline"), a registration statement
        on
        Form S-1 or SB-2 (or, if the Company was then eligible, on Form S-3) with
        the
        SEC under the 1933 Act (the "Initial Registration Statement") for the
        registration for the resale by all investors who purchased Debentures or
        the
        Company's warrant. The Company was required to use its best efforts (i) to
        have
        the Initial Registration Statement declared effective by the SEC no later
        than
        120 days after the date of filing (the "Scheduled Effective Deadline") and
        (ii)
        to insure that the Initial Registration Statement and any subsequent
        Registration Statement remained in effect until all of the Registrable
        Securities were sold. The Company would be in default if the Initial
        Registration Statement was not declared effective by the SEC within 120 days
        after filing thereof.
 
 In
        the
        event the Initial Registration Statement was not filed by the Scheduled Filing
        Deadline or was not declared effective by the SEC on or before the Scheduled
        Effective Deadline, or if after the Initial Registration Statement was declared
        effective by the SEC, sales could not be made pursuant to the Initial
        Registration Statement, the Company would be required to pay as liquidated
        damages (the "Liquidated Damages") to the holder, at the Company's option,
        either a cash amount or shares of the Company's common stock within 3 business
        days, after demand therefore, equal to 2% of the liquidated value of the
        Debentures outstanding as Liquidated Damages for each 30 day period after
        the
        Scheduled Filing Deadline or the Scheduled Effective Deadline, as the case
        may
        be. The Debentures were repaid in full in cash on July 1, 2006. Accordingly,
        the
        Company has no further registration obligation with respect to the
        Debentures.
 
 On
        July
        20, 2005, the Company filed a Registration Statement on Form SB-2 with the
        SEC
        to register the shares of common stock pursuant to the Standby Equity
        Distribution Agreement with Cornell, as well as the shares of common stock
        with
        respect to the Company's commitments to Advantage, Newbridge and Knightsbridge.
        The Registration Statement, as amended, was declared effective by the SEC
        on
        February 13, 2006. The Company withdrew the SB-2 Registration Statement on
        October 24, 2007, and subsequently updated the filing on February 28, 2008.
  **11.
        Stock-Based Compensation Plans**





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





Consultant
      Stock Plan:





On
      December 11, 2003, the Company adopted the 2003 Consultant Stock Plan (the
      “Consultant Stock Plan”). The purpose of the Consultant Stock Plan is to advance
      the interests of the Company by helping the Company obtain and retain the
      services of persons providing consulting services upon whose judgment,
      initiative, efforts and/or services the Company is substantially dependent,
      by
      offering to or providing those persons with incentives or inducements affording
      such persons an opportunity to become owners of capital stock of the Company.
      Consultants or advisors are eligible to receive grants under the 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.


82


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. During the year ended December 31, 2004, the Company issued 411,112
      shares of common stock and an option to purchase 100,000 shares of common stock
      under the Consultant Stock Plan (exercisable on a cashless basis). During the
      year ended December 31, 2005, the Company issued 104,845 shares of common stock
      and an option to purchase 18,800 shares of shares of common stock (exercisable
      on a cashless basis) under the Consultant Stock Plan. During the year ended
      December 31, 2006, the Company issued 368,800 shares of common stock under
      the
      Consultant Stock Plan, of which 118,800 shares were issued upon the exercise
      of
      the options issued in 2004 and 2005, the payment for which was by the surrender
      and cancellation of 19,800 shares of common stock. As of December 31, 2006,
      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 year ended December 31, 2006, the Company issued options to purchase 300,000
      shares of common stock under the 2004 Option Plan. As of December 31, 2006,
      options to purchase 660,000 shares of common stock were reserved for issuance
      under the 2004 Option Plan. The Company did not issue any options under the
      2004
      Option Plan in 2004 or 2005.




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 as of December 31, 2006.


83


A
      summary
      of the combined stock option activity during the years ended December 31, 2006
      and 2007 for the three plans discussed above is as follows:




WeightedNumber
            
            averageof
            
            exerciseoptions
            
            priceBalance
                outstanding, January 1, 2006
            
            
            211,500
            
            $
            0.15Options
                granted
            
            
            300,000
            
            
            3.01Options
                exercised
            
            
            (60,000
            )
            
            0.15Options
                expiredBalance
                outstanding, December 31, 2006
            
            
            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
            
            $
            5.24Balance
                exercisable, December 31, 2007
            
            
            335,500
            
            $
            2.33




The
      intrinsic value of outstanding stock options at December 31, 2007 was
      $1,731,000, as compared to $1,071,000 at December 31, 2006. The
      intrinsic value of exercisable stock options at December 31, 2007 was
      $1,261,000, as compared to $641,000 at December 31, 2006. Information
      relating to outstanding stock options at December 31, 2007, summarized by
      exercise price, is as follows:




Outstanding
            
            ExercisableExercise
                PricePer
                Share
            
            Shares
            
            Life
              (Years)
            
            Exercise
                Price
            
            Shares
            
            Weighted
                 AverageExercise
              Price$6.00
                - $7.20
            
            
            818,000
            
            
            9.7
            
            $
            7.01
            
            
            65,000
            
            $
            7.08$4.00
                - $5.99
            
            
            120,000
            
            
            5.8
            
            $
            4.05
            
            
            20,000
            
            
            4.30$2.00
                - $3.99
            
            
            200,000
            
            
            4.7
            
            $
            2.51
            
            
            100,000
            
            
            2.02$0.22
                - $1.99
            
            
            150,500
            
            
            1.7
            
            $
            0.22
            
            
            150,500
            
            
            0.221,288,500
            
            
            7.52
            
            $
            5.24
            
            
            335,500
            
            $
            2.33




84


For
      the
      year ended December 31, 2007, the value of options vesting during the period
      was
      $ 1.1 million. As of December 31, 2007, the Company has outstanding unvested
      options with future compensation costs of $4.1 million, which will be recorded
      as compensation cost as the options vest over their remaining average life
      of
      7.5 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 years ended December 31, 2006 and 2007 is as
      follows:




Number
            
            Weightedaverageof
            
            exercisewarrants
            
            priceBalance
                outstanding, January 1, 2006
            
            
            2,014,184
            
            $
            0.34Warrants
                granted
            
            
            2,140,000
            
            
            0.49Warrants
                exercised
            
            
            (1,324,388
            )
            
            0.20Warrants
                expiredBalance
                outstanding, December 31, 2006
            
            
            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
            
            $
            3.47





The
      intrinsic value of outstanding warrants at December 31, 2007 was $9.5 million,
      as compared to $11.0 million at December 31, 2006. Information relating to
      outstanding warrants at December 31, 2007, 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
            
            
            1,600,000
            
            
            0.79
            
            $
            0.50
            
            
            1,600,000
            
            $
            0.503,972,007
            
            
            1.66
            
            $
            3.47
            
            
            3,972,007
            
            $
            3.47


85


**12.** **** **Commitments**





Payments
                due by Fiscal Years Ending December 31,Total
            
            2008
            
            2009
            
            2010
            
            2011
            
            2012Employment
                agreement
            
            $
            3,950,000
            
            $
            1,744,000
            
            $
            1,273,000
            
            $
            875,000
            
            $
            58,000
            
            
            -Capital
                lease obligations
            
            
            186,000
            
            
            62,000
            
            
            58,000
            
            
            61,000
            
            
            3,000
            
            
            2,000Operating
                lease obligations
            
            
            7,932,000
            
            
            2,262,000
            
            
            2,092,000
            
            
            1,609,000
            
            
            1,136,000
            
            
            833,000Total
                contractual cash obligations
            
            $
            12,068,000
            
            $
            4,068,000
            
            $
            3,423,000
            
            $
            2,545,000
            
            $
            1,197,000
            
            $
            835,000




Lease
      Commitments:





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




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





The
      aggregate minimum future rental payments under non-cancelable operating leases
      for facilities in operation at December 31, 2006, excluding operating expenses,
      annual rent escalation provisions, and contingent rental payments based on
      achieving certain pre-determined sales levels, are as follows:




Employment
      Agreement with President and Chief Executive Officer:





Effective
      March 1, 2006, the Company entered in a three-year employment agreement with
      Mitch Francis, its President and Chief Executive Officer, to serve as Chairman
      of the Board of Directors, President and Chief Executive Officer. The agreement
      provides for a base annual salary of $275,000, annual increases of 8%, standard
      benefits, and annual bonuses equal to 6% of the Company’s annual earnings in
      excess of $500,000 before taxes, depreciation and amortization, but after
      interest expense. Mr. Francis did not earn any bonus in 2006. The agreement
      also
      provided that the Company issue to Mr. Francis 500,000 shares of restricted
      common stock within 30 days of March 1, 2006. The shares of common stock were
      issued on March 13, 2006. The shares of common stock are subject to a
      prohibition on being traded, encumbered or otherwise transferred, which
      restriction shall lapse in equal annual installments on March 13, 2007, 2008
      and
      2009. Upon the occurrence of a change in control of the Company, as defined,
      Mr.
      Francis will be entitled to, among other compensation, an amount equal to five
      times his annual base salary immediately prior to the change in control event.


86


Severance
      Agreement:




Retirement
      Plan:





The
      Company has a 401(k) retirement plan which covers substantially all employees.
      Under the plan, participants may defer the receipt of up to 12% percent of
      their
      annual compensation, but not to exceed the maximum amount as determined by
      the
      Internal Revenue Code. The amount of the employer matching contribution is
      equal
      to the sum of 25% of each dollar deferred, limited to 1% of the participant’s
      compensation. The Company may make additional matching contributions as
      determined and approved by the Board of Directors. Total 401(k) retirement
      plan
      expense amounted to $9,614 and $3,876 for the years ended December 31, 2006
      and
      2005, respectively.





Bank
      Letters of Credit:





During
      the year ended December 31, 2006, at the request of two vendors, the Company
      opened two bank letters of credit for $5,000 and $7,000, respectively. The
      Company used two certificates of deposit in the amounts of $5,000 and $7,000,
      respectively, to secure the letters of credit. The vendors were the
      beneficiaries of the letters of credit. As of December 31, 2006, there were
      no
      amounts outstanding under the letters of credit.





**Note
      13**  **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.”




In
      December 2007, the Company announced that it had entered into letters of intent
      to acquire two live theatrical and concert production companies; Magic Arts
      & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace). As
      part of the letters of intent the managements’ of Magic and NewSpace would
      manage the operations of their respective companies’ for the benefit of Tix
      Corporation from January 2, 2008 until the transactions could be finalized.
      The
      managements’ of Magic and NewSpace were required to consult and obtain the
      approval of the management of Tix Corporation prior to entering into any long
      term arrangements or transactions that were outside the normal course of
      business. Further, Tix Corporation assumed all responsibility for any losses
      or
      profits that might be incurred or earned during this period by both Magic and
      NewSpace. The acquisition of Magic was completed on February 29, 2008 and the
      acquisition of NewSpace was completed on March 12, 2008.  Both Magic
      and NewSpace 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.


87




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





Information
      related to these operating segments is as follows.





**Ticketing**
            
            **Exhibit**
            
            **Corporate**
            
            
            
            **Consolidated****Services**
            
            **Merchandising**
            
            **Expenses**
            
            **Eliminations**
            
            **and Combined****2007**Revenue
            
            $
            14,284,000
            
            $
            4,283,000
            
            $
            -
            
            $
            -
            
            $
            18,567,000Direct
                operating expenses
            
            
            8,829,000
            
            
            2,843,000
            
            
            
            
            
            
            
            
            11,672,000Selling,
                general and administrative expenses
            
            
            15,029,000
            
            
            905,000
            
            
            5,658,000
            
            
            -
            
            
            21,592,000Depreciation
                and amortization
            
            
            195,000
            
            
            1,229,000
            
            
            244,000
            
            
            
            
            
            1,668,000Operating
                income (loss)
            
            $
            (9,769,000
            )
            $
            (694,000
            )
            $
            (5,902,000
            )
            $
            -
            
            $
            (16,365,000
            )Total
                assets
            
            $
            2,977,000
            
            $
            47,224,000
            
            $
            4,967,000
            
            $
            -
            
            $
            55,168,000**2006**Revenue
            
            $
            5,388,000
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            5,388,000Direct
                operating expenses
            
            
            2,173,000
            
            
            
            
            
            
            
            
            
            
            
            2,173,000Selling,
                general and administrative expenses
            
            
            1,214,000
            
            
            
            
            
            2,559,000
            
            
            
            
            
            3,773,000Depreciation
                and amortization
            
            
            159,000
            
            
            
            
            
            5,000
            
            
            
            
            
            164,000Operating
                income (loss)
            
            $
            1,842,000
            
            $
            -
            
            $
            (2,564,000
            )
            $
            -
            
            $
            (722,000
            )Total
                assets
            
            $
            1,699,000
            
            $
            -
            
            $
            933,000
            
            $
            -
            
            $
            2,632,000




88




**15.
      Subsequent Events:**





In
      December 2007, the Company announced that it had entered into letters of intent
      to acquire two live theatrical and concert production companies; Magic Arts
      & Entertainment, LLC (Magic) and NewSpace Entertainment, Inc. (NewSpace). As
      part of the letters of intent the managements’ of Magic and NewSpace would
      manage the operations of their respective companies’ for the benefit of Tix
      Corporation from January 2, 2008 until the transactions could be finalized.
      The
      managements’ of Magic and NewSpace were required to consult and obtain the
      approval of the management of Tix Corporation prior to entering into any long
      term arrangements or transactions that were outside the normal course of
      business. Further, Tix Corporation assumed all responsibility for any losses
      or
      profits that might be incurred or earned during this period by both Magic and
      NewSpace. The acquisition of Magic was completed on February 29, 2008 and the
      acquisition of NewSpace was completed on March 12, 2008.  Both Magic
      and NewSpace 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 able 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.





Acquisitions:





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 $1.5 million in cash and issued to them a total of 476,190
      restricted shares of our common stock with a market value of $2.4 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 soon to
      be formed 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 29, 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.


89


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.




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 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.





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,





INDEX
      TO
      EXHIBITS




ExhibitNumber
            
            Description
                of Document3.1
            
            Certificate
                of Incorporation, as filed with the State of Delaware on April 6,
                1993
                (1)3.2
            
            Certificate
                of Amendment to Certificate of Incorporation of Cinema Ride, Inc.,
                as
                filed with the State of Delaware on August 31, 1993 (1)3.3
            
            Certificate
                of Amendment to Certificate of Incorporation of Cinema Ride, Inc.,
                as
                filed with the State of Delaware on September 16, 1996
                (1)3.4
            
            Fourth
                Amendment to Certificate of Incorporation of Cinema Ride, Inc., as
                filed
                with the State of Delaware, effective March 3, 2005
                (6)


90




3.5
            
            Bylaws
                of the Company (1)4
            
            Voting
                Agreement between Mitch Francis and Iqbal Ashraf dated as of July
                12, 2006
                (10)10.3
            
            Warrant
                issued to Finova Capital Corporation to purchase 25,000 shares of
                common
                stock at $0.50 per share (2)10.4
            
            Warrant
                issued to Finova Capital Corporation to purchase 25,000 shares of
                common
                stock at $1.00 per share (2)10.5
            
            Warrant
                Holder Rights Agreement between the Company and Finova Capital Corporation
                (2)10.8
            
            2003
                Consultant Stock Option Plan (3) (C)10.9
            
            2004
                Stock Option Plan (5) (C)10.10
            
            2004
                Directors Stock Option Plan (5) (C)10.22
            
            Gang
                Consulting Ltd. Consulting Agreement dated January 3, 2005
                (7)10.24
            
            Knightsbridge
                Holdings Ltd. Consulting Agreement (8)10.25
            
            Third
                Amendment to Lease between the Company and 12001 Ventura Corporation
                (9)10.29
            
            Employment
                Agreement between Tix Corporation and Mitch Francis effective March
                1,
                2006 (11) (C)10.30
            
            Agreement
                of Purchase and Sale between Tix Corporation and William Bartfield
                and
                David Bates effective November 30, 2006 (12)10.31
            
            Amendment
                to Agreement of Purchase and Sale between Tix Corporation and William
                Bartfield and David Bates dated January 11, 2007 (12)10.32
            
            Asset
                Purchase Agreement between Tix Corporation and John’s Tickets, LLC, dba
                AnyEvent Tickets, effective March 14, 2007 (13)10.33
            
            Employment
                Agreement between Tix Corporation and John Pirample effective March
                14,
                2007 (13) (C)10.34
            
            Consulting
                Agreement between Tix Corporation and Timothy Bordonaro effective
                March
                14, 2007 (13) (C)


10.35
                
                Asset
                    Purchase Agreement dated as of August 6, 2007 among the Company,
                    EM and
                    the Members (14)10.36
                
                Employment
                    Agreement dated as of August 8, 2007 with Curt Bechdel
                    (14)10.37
                
                Voting
                    Agreement dated as of August 8, 2007 between the Company and
                    Joseph Marsh
                    (14)10.38
                
                Consulting
                    Agreement dated as of August 8, 2007 between Lee Marshall and
                    the Company
                    (14)10.39
                
                Non-Competition
                    and Confidentiality Agreement dated as of August 8, 2007 among
                    EM, Joseph
                    Marsh, Lee Marshall, John T. Norman and the Company
                    (14)10.40
                
                Mutual
                    Termination Agreement dated November 5, 2007 between Tix Corporation
                    and
                    Centaurus One, LLC (15)10.41
                
                Agreement
                    and Plan of Merger By and Among Tix Corporation, a Delaware Corporation,
                    on the one hand, and Magic Arts & Entertainment - Florida, Inc., a
                    Florida Corporation, Joseph B. Marsh, and Lee D. Marshall on
                    the other
                    hand, dated as of February 29, 2007 (16)10.42
                
                Employment
                    Agreement dated as of February 29, 2008 with Joseph B. Marsh
                    (16)10.43
                
                Employment
                    Agreement dated as of February 29, 2008 with Lee Marshall
                    (16)10.44
                
                Agreement
                    and Plan of Merger by and among Tix Corporation and Newspace
                    Acquisition,
                    Inc., on the one hand, and Newspace Entertainment Inc., John
                    Ballard,
                    Steve Boulay and Bruce Granath, on the other hand, dated as of
                    March 11,
                    2008 (17)10.45
                
                Employment
                    Agreement dated as of March 11, 2008, between Tix Corporation
                    and John
                    Ballard (17)10.46
                
                Employment
                    Agreement dated as of March 11, 2008, between Tix Corporation
                    and Steve
                    Boulay (17)10.47
                
                Employment
                    Agreement dated as of March 11, 2008, between Tix Corporation
                    and Bruce
                    Granath (17)99.1
                
                Consent
                      of Palisades Capital Group, LLC, Independent Valuation
                      Firm.99.2
                
                Consent
                    of Gemini Valuation Services, LLC, Independent Valuation
                    Firm.




91




14.
            
            Code
                of Ethics (4)21
            
            Subsidiaries
                of the Registrant (14)23
            
            Consent
                of Weinberg & Company, P.A. (17)31
            
            Officer’s
                Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002
                (17)32
            
            Officer’s
                Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002
                (17)


92


(1)
              
              Previously
                  filed as an Exhibit to the Company’s Registration Statement on Form S-3,
                  as filed with the Securities and Exchange Commission on June 16,
                  1997, and
                  incorporated herein by reference.(2)
              
              Previously
                  filed as an Exhibit to the Company’s Quarterly Report on Form 10-QSB for
                  the quarterly period ended June 30, 2001, and incorporated herein
                  by
                  reference.(3)
              
              Previously
                  filed as an Exhibit to the Company’s Registration Statement on Form S-8,
                  as filed with the Securities and Exchange Commission on March 3,
                  2004, and
                  incorporated herein by reference.(4)
              
              Previously
                  filed as an Exhibit to the Company’s Quarterly Report on Form 10-QSB for
                  the quarterly period ended September 30, 2004, and incorporated
                  herein by
                  reference.(5)
              
              Previously
                  filed as an Exhibit to the Company’s Schedule 14C Information Statement,
                  as filed with the Securities and Exchange Commission on January
                  26, 2005,
                  and incorporated herein by reference.(6)
              
              Previously
                  filed as an Exhibit to the Company’s Annual Report on Form 10-KSB for the
                  fiscal year ended December 31, 2004, and incorporated herein by
                  reference.(7)
              
              Previously
                  filed as an Exhibit to the Company’s Registration Statement on Form SB-2,
                  as filed with the Securities and Exchange Commission on July 20,
                  2005, and
                  incorporated herein by reference.(8)
              
              Previously
                  filed as an Exhibit to the Company’s Registration Statement on Form SB-2,
                  as filed with the Securities and Exchange Commission on November
                  10, 2005,
                  and incorporated herein by reference.(9)
              
              Previously
                  filed as an Exhibit to the Company’s Quarterly Report on Form 10-QSB for
                  the quarterly period ended September 30, 2005, and incorporated
                  herein by
                  reference.(10)
              
              Previously
                  filed as an Exhibit to the Company’s Current Report on Form 8-K filed
                  September 11, 2006, and incorporated herein by
                  reference.(11)
              
              Previously
                  filed as an Exhibit to the Company’s Annual Report on Form 10-KSB for the
                  fiscal year ended December 31, 2005, and incorporated herein by
                  reference.(12)
              
              Previously
                  filed as an Exhibit to the Company’s Current Report on Form 8-K originally
                  filed December 13, 2006 and amended on February 6, 2007, and incorporated
                  herein by reference.(13)
              
              Previously
                  filed as an Exhibit to the Company’s Current Report on Form 8-K filed
                  March 20, 2007, and incorporated herein by
                  reference.
 (14)
                
                Previously
                    filed as an Exhibit to the Company’s Current Report on Form 8-K filed
                    August 13, 2007 and incorporated herein by reverence.(15)
                
                Previously
                    filed as an Exhibit to the Company’s Current Report on Form 8-K filed
                    December 12, 2007, and incorporated herein by
                    reference.(16)
                
                Previously
                    filed as an Exhibit to the Company’s Current Report on Form 8-K filed
                    March 5, 2008, and incorporated herein by reference.(17)
                
                Previously
                    filed as an Exhibit to the Company’s Current Report on Form 8-K filed
                    March 17, 2008, and incorporated herein by
                    reference.
 (C)
              
              Indicates
                  compensatory plan, agreement or
                  arrangement.




93