Hollywood Media Corp. to Distribute $0.45 per Share to Shareholders and Focus on Realizing Value of Remaining Assets, Including Netco Partners JV, and Approves 1 Million Share Repurchase Plan

Boca Raton, Florida, UNITED STATES

BOCA RATON, Fla., Jan. 16, 2018 (GLOBE NEWSWIRE) -- Hollywood Media Corp. (OTC Pink:HOLL) today announced a $0.45 per share cash distribution to its shareholders following the recently completed sale of its interest in an online ticketing business. The Company’s Board has also authorized the repurchase of up to 1 million shares of its common stock.

Hollywood Media’s Board of Directors has declared a special one-time cash distribution of $0.45 per share which it will seek to have classified as a return of capital for tax purposes. The distribution is payable March 30, 2018 to shareholders of record as of the close of business on March 1, 2018. Hollywood Media has 16,131,477 shares outstanding as of January 16, 2018, having repurchased approximately 6.3 million shares over the past four years.

Going forward, the Company looks to maximize the value of its 50% ownership interest in Netco Partners, a joint venture which owns Net Force, a prescient, fast-paced and commercially successful book series which centers on Internet and crypto-currency crime and espionage. The Company is actively engaged in a plan to resume publication of the Net Force series. It is also looking at ways to realize value from its other assets, such as its approximately $165 million in Federal net operating loss (NOL) carry-forwards and the inherent value of its shell, however the outcome of such efforts is very difficult to predict. The Company’s NOLs could be used to shelter income from Federal income taxes. At the current corporate tax rate of 21%, the NOLs could reduce or eliminate as much as $34 million in Federal tax obligations over many years, subject to limitations.

Hollywood Media has approximately $12 million in cash plus $1.5 million in a holdback of additional monies due Hollywood Media from the purchaser of the online ticketing business, and the Company has approximately $2.5 million in liabilities. Payment of the $1.5 million holdback to Hollywood Media is subject to potential offsets for customary items.  Amounts not offset are to be released to the Company in cash installments beginning on or about December 2018, as follows:  $0.45 million on or about December 2018; $0.45 million on or about June 2019; and $0.60 million on or about December 2020.

Further, the Company estimates the potential value of its shell to be as much as $2-$3 million, and possibly substantially more depending on the scope or nature of any future merger or acquisition transaction. The Company currently plans to utilize its remaining cash to maximize the value of the Company’s assets or for future share repurchases or distributions to shareholders. An overview of the estimated values of Hollywood Media’s assets is provided in a table below. 

Netco Partners and the Net Force Publishing Franchise
Hollywood Media’s principal remaining operating asset is a 50% ownership interest in Netco Partners, the joint venture which owns the Net Force franchise. The updated Net Force is vastly expanded from its original status as a branch of the FBI. Now in this fictional series set in the near future it’s a Cabinet-level department, integrating elite members of the Nation’s intelligence, law enforcement and scientific agencies with dedicated SpecOp units from the armed services investigating digital crimes involving espionage and crypto-currencies. The initial series of ten Net Force books were published in paperback between 1999 and 2006 and each was a New York Times Bestseller and millions of copies were sold worldwide. Net Force was also the subject of a TV miniseries on ABC. Cash distributions to Hollywood Media of licensing fees from the Net Force franchise have totaled approximately $11.3 million.

A story-arc outline for an additional five Net Force books has been completed and the manuscripts for the first two books in the franchise reboot have already been written. A literary agent has been retained to seek publishers to publish these books simultaneously in four formats – hardcover, eBooks, streaming audio books and podcast editions -- at an anticipated rate of one book every 9-12 months.

The Company estimates that its 50% interest in Netco Partners has a potential current value of approximately $5 million with the potential for substantially more depending upon the success of the Net Force books.

  Hollywood Media Corp. (HMC) Valuation Estimates  
  as of January 1, 2018  
  (in millions except per share data)  
  Cash on Hand$  12.0   
  Anticipated Total Holdback payments (a)   1.5   
  Estimated value of 50% Interest in Netco Partners Net Force book Franchise   5.0   
  Estimated value of $165 million in Net Operating Loss Carry-Forwards (b)   5.0   
  Estimated value of Shell   3.0   
  Estimated Total Value of all Assets   26.5   
  Estimated Liabilities:   (2.5)  
  Net Estimated Value $  24.0   
  Net Estimated Value Per Common Share$  1.49   
  Total Shares Outstanding (c) 16.13   
  Notes:  Figures above are approximate and/or estimates.   
  (a) The $1.5 million Holdback payable to HMC from the buyer in the online ticketing sale transaction is subject to potential offset by the buyer for customary items. Amounts not offset will be released to HMC as follows:
  $0.45 million on or about December 2018;
  $0.45 million on or about June 2019; and
  $0.60 million on or about December 2020.
  (b) HMC's approximately $165 million in Federal net operating loss (NOL) carry-forwards could be used to shelter income from Federal income taxes, subject to applicable limitations.  At the current corporate tax rate of 21%, the NOLs could reduce or eliminate as much as $34 million ($2.11 per share) in Federal tax obligations over many years, subject to limitations, however a value of $5 million ($0.31 per share) is used in this illustration.  In the event of a change of control of the Company, the utilization and realized value of the NOLs would be reduced to an estimated approximately $2 million, however no change of control transaction is currently being considered.   
  (c) HMC repurchased approximately 6.3 million shares of its common stock over the last four years.   

Investor Relations Representative
Hollywood Media has retained Catalyst IR to serve as its investor relations firm, with plans to issue periodic updates to its shareholders, in the form of press releases and/or updates on its web site, regarding the Company’s business progress as well as any material developments. For more information on Hollywood Media, please visit the Company’s website at: www.hollywoodmedia.com

Forward-Looking Statements
Statements in this press release and its hyperlinks may be “forward-looking statements” within the meaning of federal securities laws. The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized.  Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous potential risks and uncertainties, including, but not limited to, the need to manage our growth, the results of the relaunch of the Net Force series and realizing anticipated revenues, the amount of sales of Net Force books, and cost efficiencies, the impact of potential future dispositions or other strategic transactions by Company, our ability to develop and maintain strategic relationships, our ability to compete with other media companies, technology risks, the volatility of our stock price, and other risks and factors.  Such forward-looking statements speak only as of the date on which they are made.  In addition, statements and amounts in this press release regarding the potential value of the Company’s interest in Netco Partners, its NOLs, and its shell are estimates only.  Such estimates have not been verified by any third party, and the Company makes no representation or warranty regarding the accuracy of such estimates. The actual value of the Company’s interest in Netco Partners, its NOLs, and its shell could vary significantly from such estimates.

Investor Relations Contact:
David Collins or Chris Eddy
Catalyst IR
(212) 924-9800 or holl@catalyst-ir.com