IDW Media Holdings, Inc.

Thank you, operator. And thanks to everyone on the call for joining us.

Our remarks this evening cover the third quarter of our 2020 fiscal year, the 3 months ended July 31, 2020. Throughout, I will compare third quarter fiscal 2020 results to third quarter of fiscal 2019 results.

I'll also touch upon our outlook for fiscal 2021 and some exciting recent developments. After my remarks, Brooke Feinstein, IDW’s Chief Accounting Officer will join me to take your questions.

First and foremost, a big thank you to my IDW colleagues for their extraordinary work and dedication. Thanks for their efforts, IDW overcame the challenges of the COVID-19 pandemic to put together a solid quarter with minimal disruption to our customers and partners.

In the third quarter, IDW’s publishing operations continued to be impacted by the closure of many comic shops and our direct market distributor, Diamond, in the spring. On May 20th, Diamond resumed operations on a limited basis.

However, direct market volumes have not yet recovered to pre-pandemic levels. Our publishing team, to its great credit, pivoted quickly, successfully pursuing sales through the indirect market and direct-to-consumer channels.

Sales of popular backlisted titles, including the late Congressman John Lewis March trilogy, Alan Roberts Beauty of Horror coloring book, Teenage Mutant Ninja Turtles titles and Joe Hill’s and Gabriel Rodriquez’s Locke & Key titles were particularly strong. The latter have benefited enormously from the success of season one of the eponymous Netflix series.

We were all saddened by the passing of Congressman John Lewis andgratefulto himfor his enormous and multifaceted contributionstoracial justice and a stronger, more generous in Loving America. Publishing’s income from operations is essentially breakeven in the third quarter, a significant improvement from the $1.2 million loss in the year ago quarter and a $646,000 loss in the prior quarter.

We expect further improvement in the coming quarters, as we secure better economics from our licensing deals or building our IP library to align with our entertainment division’s development priorities. We are also overhauling publishing’s website and approximately, which contribute to the long term growth of the increasingly important B2C direct-to-consumer channel.

At Entertainment, the first six episodes of Wynonna Earp season 4 have now aired on SYFY. Production of the second half of the season delayed by COVID-19 has resumed.

The start of production of Locke & Key season 2, which was ordered by Netflix this spring following the success of season one, is planned for later this month. Entertainment’s revenue was $3.3 million in the third quarter compared to just $31,000 in the year ago quarter.

We generated most of the revenue on delivery of five of the 12 Wynonna Earp season 4 episodes to SYFY during the quarter. The sixth episode of part one of season 4 was delivered in Q4.

We pick up some additional revenue adjusting for an under accrual related to October Faction tax credits. Entertainment’s loss from operations therefore was $3.2 million compared to a loss of $765,000 in the third quarter of 2019.

This loss for this quarter is primarily reflected – reflecting expenses recognized on delivery of the five Wynonna Earp episodes during the quarter, as well as an adjustment for a legacy V Wars over accrual of tax credits. We have previously discussed our determination to pivot entertainment to lower risk production financing models that will yield predictable income.

Unfortunately, the terms Wynonna Earp fourth season reset before that pivot. And further losses will be recognized as we deliver the remaining episodes in our capacity as it shows distributor.

SEVEN24 Films based in Canada means the studio and production company behind Wynonna Earp Looking ahead, entertainment has developed a strong development slate and made good progress in negotiations with several potential premium buyers. I am optimistic that we will have very good news report in the coming period.

Just bear in mind that the buyers in these deals dictate the timing and content of announcements of new series. Following the quarter close, we exercise our contractual rights to acquire certain rights for prior seasons of Wynonna Earp that we intend to market for international distribution.

Also, in terms of future revenue timing, we won’t receive payment for Locke & Key season 2 on with the episodes are produced and delivered. Because of the current post COVID-19 production schedule, that likely won't be until we are well into the new calendar year.

Turning now to CTM. This quarter we announced an agreement to sell CTM to our Chairman, Howard Jonas.

The sale is conditioned on the consent of the lender and the SBA related to CTMs PPP loan. It's not yet clear when we will be able to get the consent and close this deal, but we are working to get it done as soon as possible.

In the meantime, we're reporting CTMs $1.1 million loss this quarter in discontinued operations. CTMs results are not including consolidated revenue or consolidated loss from operations in either this quarters or the year ago quarters results.

Consolidated revenue for the quarter was $8.5 million, an increase from $5.4 million in the year ago quarter, primarily as a result of the Wynonna Earp episode deliveries. Our net loss was $0.47 per share, of which $0.12 was contributed by CTM, compared to a loss of $0.20 in the year ago quarter.

The loss is recognized upon delivery of the five episodes of Wynonna Earp and the substantial impact of COVID-19 on CTMs business drove the increase in the consolidated loss. Turning to our balance sheet.

We continue to shed debt and are on track to eliminate it by this calendar years end. As I noted while wearing my previous CFO hat, we are transitioning to an asset-light financing model to make more efficient use of our capital.

All in all, this was a solid quarter in which we overcame many of the operational challenges, and we continue to of COVID-19. Our financial results are impacted by the legacy production and financing deals that we will not replicate going forward.

Turning now to the big picture. The content arms race and the massive demand in streaming services and cable networks, as they battle for global audience provides IDW with an exceptional opportunity.

To seize it, we are aligning our publishing and entertainment businesses so that we holistically evaluate IP and build franchises across our business. We are one IDW.

We took significant steps in the right direction during and after the quarter by bringing in new leadership and promoting internally to fill key positions. Last week, we announced that Nachie Marsham, formerly the executive editor at Disney Publishing worldwide, will serve as our new publisher.

He will be working closely with Jerry Bennington, who was promoted to President of IDW Publishing earlier this year. We also promoted Veronica Brooks to VP of Creative Affairs, Veronica and Rebekah Cahalin, whom we earlier named General Manager and EVP Operations, covering both IDW Publishing and IDW Entertainment will focus on the seamless integration of the business's creative and operational processes.

Wrapping up. I'd like to thank our Chairman, Howard Jonas, and IDW's Board of Directors for entrusting me with the CEO position.

It's a great honor to lead this talented team and I look forward to working with them to fulfill the promise and potential of IDW. One final note at the corporate level, we continue to move forward toward reregistration with SEC and will then seek a national exchange listing to increase IDW’s visibility and liquidity in the capital markets.

Now, Brooke and I will be happy to take your questions. Operator, back to you for Q&A.