IDW Media Holdings, Inc.

Hi. You have talked about – I talked with David before on e-mail [indiscernible] were discussed with the company?

Thank you, Darrell and thank you for your e-mails. Yes, as I have mentioned, I don’t have your e-mail in front of me at the moment.

Apologies. But yes, many of the ideas that you had put forward in the e-mail are things that we are discussing internally and hopefully taking actions on some of those where it’s appropriate.

Alright.

If you have any particular ones that you wanted to dive in on I’m happy to do so. Like I said, I just don’t have – I wish I remembered the e-mail better.

Just one other one on acquiring companies, right, [indiscernible] on aftershock comments that is currently in the [indiscernible]. You won’t know if I would consider acquiring them and adding that would have through a proposal?

I won’t comment specifically with regard to aftershock. There are from time-to-time we will look at potential M&A opportunities and when appropriate to pursue them.

So there is nothing at present that we feel we should be disclosing in terms of potential M&A activity.

Okay. That was it.

Thank you.

Yes, I was looking at the financials. And one of the questions I have is how much of the business is going to the direct market, because it’s hard to tell from the financials.

I saw the 77.7% was going to Random House. And I saw the 500,000 something that was coming from the book fair market I assume that’s the actual sales, not the increase, Jimmy.

But it doesn’t add up to the total amount of that they mentioned $26 million, Jimmy. In other words, even when you add in the direct comic sales, 120,000 something, and then you add in the online 169,000, they don’t come up to $26 million?

So in terms of the revenue breakdown, I’ll talk about the print side, meaning the publishing side of the house, not the entertainment. There are a few different buckets, let’s call it the book market, the direct market, digital and direct to consumer sales.

In terms of the breakdown, the direct market is about 26% of the overall sales. In terms of the large portion of the remainder is books then probably about 10% is related to digital and trying to think in the direct-to-consumer for fiscal ‘23, I am trying to recall it’s probably, I don’t know about, Andrew, how much are we talking about for the fiscal year ‘23 for direct-to-consumer 3%, 4%?

Well, we are taking – no, I mean, what I am saying is if the number is 26%, for the direct market itself, okay, that it didn’t say that. Does that make sense?

It said it had a lower number like a couple of 100,000 only. And I was found that shocking, I thought, wow, I saw that IDW was in the top five of the publishers in the direct market.

And I was surprised that it was that low. So that may have just been an error in the….

Yes, I think probably the – I imagined the disconnect is that most of the direct sales goes through Penguin Random House, meaning Penguin Random House represents us in both the direct market and the book market. And from time-to-time, we will have direct sales to specific retailers that don’t go directly through PRH, but that’s the rare occurrence, not the norm.

And I think that’s probably meaning there.

But, if that’s the case, that would be in the 77.7%. So there is not – there is still 22.3% and when you add the other ones, if that’s the case, they don’t add up to that number.

So that was one. Second question is a little different, okay.

The second one was, is the book market really just 500 for the Scholastic, just 500,000 something because they are such a big entity, they are the largest – they have the largest market share. So with all the number one books you have, I mean with all the big hits you have, that’s all they can do, especially the Ninja Turtles, etcetera?

Scholastic generally is sort of selling at book fair to a younger audience to little age children. So books like Scholastic therefore is skewing the product toward a less mature content, so things like Last Ronin and last year’s Witch are arguably appropriate but I don’t think Scholastic would want that kind of content.

They are looking more at Saturday Morning Adventures, Sonic the Hedgehog. And so some of our biggest sellers are not, don’t sell through Scholastic.

Yes, got it. What pocket do you put libraries because that’s a growing market.

I believe libraries is in the book market. But Andrew, you want to confirm that?

Yes, library sales would be through PRH through our distributor, which would be included in our general book market.

Okay, okay. And the only other question, I have is really does this mean at this point, since you are now with the revised numbers, making a profit?

Should this have a positive effect at this point on the stock price, which has been steadily somewhere between $0.42 and $0.60 a share?

I don’t think – I don’t feel comfortable opining on what the market should determine the stock price to be. I mean I generally I…

Yes. I don’t think as you should – I am not asking you to predict the market, I am saying is, am I interpreting it correctly that at this point forward, because you are profitable, this is not just a fluke, this is whatever it was behind the $5 million loss is not a continual loss, it was like…?

Yes. I think I would say that we have turned the corner.

I don’t want to predict that we will be profitable every quarter, because I can’t predict what the future holds…

I am not asking you for that, I wasn’t asking to predict…

You are asking about the momentum of the losses, I would say the momentum of losses has been staunched and hopefully anything from here and would just be the ordinary quarter-over-quarter.

Yes. I only asked because I increased my percent, yes, I increased my shares 50%, and I wanted to increase it regularly, because I think it’s a great company.

You know what I mean, it just doesn’t get – I see the number of shareholders have increased, so I think you guys are doing a great job, especially with the man who are – people coming in.

Thank you. Pleasure, thank you very much.

Yes. What I would like to just point out and you see these in the financials, as well is that we have really worked over the past, especially six months of fiscal year ‘23 to right size our organization, specifically our OpEx.

And so you will see that, when you look at the operating expenses, we have cut OpEx by about 21%, 22% for the year. But really in the second half of the year, we cut it by over a third.

And so we have taken these actions starting in the beginning of Q3 fiscal year ‘23 in response to obviously some of the performance over the past couple of years. And so do feel like we are in a good position as we can be to hopefully have – hopefully, we don’t want to predict the future, but hopefully have better results than maybe we have seen in the recent past.

Well, one thing I have noticed is that a lot of the competition, as the market has been impacted, and I don’t know, if you have addressed that, that sales in the direct market has decreased, but yet most of your sales come outside of the direct market, which requires having good operations, and also having the cash flow to cover development of an entire graphic novel, rather than putting out a single issue and then waiting for all the issues to be out and then putting together as a graphic novel. So, as the market moves to graphic novels, some of the other competitors that you have will find themselves at a disadvantage.

No, I guess…

A lot of the publishers are just producing a single issue, then with single issue, they take the cash flow from issue one to pay for issue two, issue two to pay for issue three, and they don’t have access to funding and bank lines.

Yes. I mean like I think the standard in the industry – I don’t want to speak about what our competitors are doing.

So, I will just kind of say what I think is this industry standard, is that the issues come out whether it’s five, six or more issues for a comic or theoretically a lot fewer. And then those are collected as a trade paperback and those are generally what are going into the book market, which I think is pretty normative for our competitors as well to do that.

So, I don’t know that we are that materially differentiated in terms of the ability to trend – to leverage our direct market sales into the book market. Not to say that we are not good at it, but I don’t want to give the misimpression that our competitors aren’t similarly capable.

Well, I was looking at the numbers from 2023, and you guys had seven titles in the top 750, which is a remarkable number.

And that’s a testament to the editorial team and I mean the entire team.

Exactly, but those were some of the reasons that I increased my share. As soon as I saw that, I said, wow, these guys are really good, they just need to clear up their – and right size themselves.

Yes. No, we have thankfully a very talented team across the board.

I hope you are coming into the – being a leader is caught showing that effect because you can see a big effect since you joined, okay. Thank you very much.

Thank you.

Okay. Well, I don’t know if that is officially the end of the call, but thank you.

Thank you everyone for participating and listening in. I look forward to the opportunity to engage with our partners in the future.

So, thank you for your time. Have a good day.

And we will keep our head down and try to keep working to create value for the shareholders of IDW. I look forward to communicating with you again in the near future.