IDW Media Holdings, Inc.

Yes. I have a question as to what they're going to do to diversify their products and if they're going to decide to use older proven methodologies that work like back in the day, they used to make comments out of newsprint and they would advertise them.

Thank you for the question, Eric. I'm not fully sure I understand -- would you mind maybe being a bit more specific.

I'm not sure I'm fully understanding the question in terms of how you're wondering if IDW will diversify its product or mimic or earlier printing methodologies.

Well, you are right now doing a lot of licensed products. I mean licensed products require paying for licenses.

So I didn't know if you were doing any more original content or what have you.

Sure. I mean in terms of originals, I mean, first of all, through our Top Shelf imprint, we put out usually between, I'd say, 10 to 20, but it's usually about 15 original titles a year as original graphic novels.

Obviously, IDW Originals put out probably close to 2 dozen original titles that should tally them all up. And in terms of our imprints that we've talked about, IDW Dark and our upcoming imprints related to Heroes to Crime, to Legends, each of those will likely represent probably 3 or so titles a year.

So it'll take some time to spool up. But I imagine collectively, we'll probably have close to 25 to 30 original titles a year that we think can be opportunities for further IP expansion.

I have some questions like, I think, last year about Star Trek Prodigy. Was there any update about that?

Sorry, I didn't fully capture. You said Star Trek what?

Prodigy. The series picked up by Netflix for the series in the season.

And then I guess canceled for third season, but I know that is doing a lot of Star Trek stuff, but wondering if we can pick it up with the comic.

I have to look at our pub schedule. I don't believe that we have a Star Trek Prodigy on our pub schedule, but I'd have to talk to our Star Trek editorial team.

I do believe that our Star Trek pub schedule for the next year or so, probably even deeper is somewhat set. But I'll take that back to our team and see if that's something that we think would reach a large fan audience.

I think it [indiscernible] with actor, well, the actress, she expressed disappointment that I canceled after the second season, and she want to do more with the series.

Sure. Yes.

I mean, look, it's sort of an interesting creative decision for the editorial team. Obviously, when looking at a license, the bigger the audience presumably means that there are more potential readers that would be engaged with the content.

So shows that run longer and have bigger audiences that justify continued renewals on television or movies, that's one way to approach a license. The other is to say there's a diehard audience that really loves a particular title.

And even though it couldn't get renewed on TV, maybe the right format for that audience is in comics. And I don't think that it's a one size fits all.

I think that that's a creative determination that our editorial team will have to make. So I think sometimes we've gone for the biggest and most continuous titles.

And sometimes we've gone after titles that I think maybe have a more niche audience. So I'd have to talk to our editorial team to engage on this particular title that you're recommending.

Okay. That's all really for now.

Okay. I will take it back to our editorial team.

But I don't -- like I said, I do not think that it's on the schedule. That title does not -- doesn't ring the bell at the moment as being part of our Star Trek pub plan for the coming year.

We do have some great Star Trek titles. So everyone go and pick them up.

I have, I guess, a couple of comments and then maybe intersperse in the comments, some questions. From a financial point of view, working capital use was $2.25 million in the first 9 months, which is about $8 a share.

You had $21 a share in cash at the end of the third quarter. So -- and the book value -- tangible book value is about $70 a share.

I guess the question within the financials is, what do you think is going to happen in working capital? Will you continue to use working -- and I know it depends on a lot of factors, but revenues were down for the 9 months.

You still use working capital. You have one might say a fortress balance sheet.

Do you think some of that working capital will come back into cash as we go forward? And that's sort of number one.

And then I have another question about IDW Entertainment.

Sure. Just to be clear, when you're saying some of that working capital will come back into cash, are you saying that the company will be positive cash flow?

Is that the question?

Yes, yes.

Yes. Look, I think that we faced some material headwinds this year.

I mean, the biggest headwind was that one of our largest customers is Diamond Comic Distributors, and they went bankrupt. And when -- at the time they went bankrupt, they owed a significant amount of money to IDW through Penguin Random House to somewhere in the range of around $850,000.

So after all said and done, in terms of our responsibility, it knocked out about $750,000 of our cash flow. So I think without that, I think we would have been a lot closer to the positive cash.

We had a few major write-downs, which is more of a balance sheet issue than a cash issue. And then just in terms of other material events, we had a few titles this year that we anticipated and our distribution partners anticipated having much higher sales volume and just didn't come through the way we had hoped.

So we had a great year to offset it -- to offset some of those disappointments. But I think knowing our our compatriots in the publishing industry and having those close relationships.

Obviously, they don't file publicly. So take it with a grain of salt, but I'd say we are faring much better than other publishers that we are hardly going to have a cash loss even when we had a few major titles that didn't quite hit the way we had hoped along with a major distributor going out of business, but we don't anticipate that for 2026.

Like so we do -- right now, we are -- I mean, look, I would have said the same thing if you asked me a year ago that we're projecting a positive cash flow for 2025. So obviously, take me as far as you could throw me.

But I do feel that the headwinds that we faced in '25 are I'd say, once in a decade, maybe once in 2 or 3 decade kind of a headwind that I would not anticipate for '26. So we're feeling optimistic that we will have free cash flow and some of that working capital will go to the bottom line.

Is there seasonality in the business? I mean you had -- obviously, with the reverse split, it put up a big earnings number, earnings per share number of over $1.

I think you made money in the previous year in the same quarter. Is there a seasonality in the business...

Yes, there's definitely seasonality. There's definitely seasonality in that our third and fourth quarters, which typically correspond to the holiday season, literally it's buying up for the holiday season.

It's not necessarily the holiday season itself, but it's Barnes & Noble and Amazon and a lot of our big buyers stocking up for the coming holiday season. So typically, we -- our third and fourth quarters are our largest quarters.

And then, of course, it's seasonal in terms of we're in the pop culture business. So sometimes titles are just going to pop off and we can't exactly understand why.

Like we'd like to believe that we're tastemakers and we can choose which titles are going to be huge successes, but sometimes things surprise us. Some of our most successful titles in the last, I don't know, 2 years since I've been part of IDW, I wouldn't say that when we first looked at them, everyone said, "Oh, those are definitely going to be the winners that are going to lead the pub plan."

There are some that like Turtles ongoing, I think it's something that people felt confident about. But something like beneath the trees or Stoops, these are titles that are untested, and we have lots of great titles.

I mean titles that I read that I'm like, I don't understand how not everyone in the world is picking this up for their kids. These are such great books.

Why some things just pop off and some things don't. So like there's a season -- I don't know if I could call that seasonality, but that does make our business, I'd say, somewhat seasonal in that sometimes we crest the wave and sometimes the wave overtakes us.

Sure. No, I understand.

IDW Entertainment, which has not been a source of revenue and has gone over the last several years, has gone through the transition from being, I guess, you'd call it an asset-heavy business to the intention being asset-light. But as I said, I mean, there's effectively no revenues there at the current time.

But in the disclosure, there was a statement that you're in active discussions with major studios, streamers, production companies, et cetera. And you mentioned in the disclosure for separate or identifiable titles.

And then in addition to that, original horror, I guess, IP from IDW Dark. Look, I know you can't identify where you are in these discussions with respect to any of these -- any of the IP.

And you -- but sort of like a confirmation, and it seems this way, again, in the disclosure that you're going to pursue an asset-light strategy with respect to any arrangements that you have with these -- or that you enter into with these studios. I mean, is that something -- again, it's sort of in the disclosure.

Is that something that you can sort of confirm or maybe talk a little bit about or qualitatively, just speak about what we might look forward to with respect to IDW Entertainment in 2026?

Yes. I think when you say asset-light, that's probably meaning we're not going to be investing into the production budget or the development budget, but we're more the source of intellectual property.

We join as an executive producer. We bring our skills to bear to the project, help source stories and connect stories with directors, with actors, with talent teams.

And I think that is right. That is the approach that we're taking.

IDW, I don't know, going back the last 10 years or so has tried different approaches with entertainment. And I'd say some of them were more costly than others.

I just don't think -- not to say that IDW shouldn't consider potentially investing into entertainment franchises and having development financing or production financing facility, I just don't think that we're structured currently to do that. And so yes, we -- I'd say we're going to be pursuing an asset-light approach.

But the good thing is that the partners that we're talking to that we're engaging with, I think -- I don't think that they're looking for that capability from IDW. Like I don't think they see our core competency as being financiers or producers who are going to bring the dollars to the table.

I think they see us as storytellers with great creators, great creative partners, collaborators to evolve those stories from the pages of a book to the script onto the screen. And so I think we'll continue to bring our best value to the table with those creative partners.

So you mentioned before that you think a good number for original titles per year, 25 to 30. I mean, is there -- have you -- I mean, I would imagine that you are constantly looking to mine sort of the long tail in your library with respect to what studios or streamers might be looking for.

Is that -- because I think the titles that you disclosed was sort of relatively newer titles. Is that right?

Not -- I mean, I guess, relative is a relative term, so...

Okay, so I can put a number on it, we can say the last 18 -- well, last 2 years since basically, you've been at the helm. So the 4 titles that were identified.

No, no, no. I mean I think some of the titles that we referenced, I have to go back and look at the disclosure, but I think Kill Lock and the Delicacy, I think those are titles that all were around before I came around.

So I mean there are titles that -- I mean, like we've gotten interest on titles that are, I don't know, like 15 to 20 years old that just are in the zeitgeist of what's going on in the world. And I don't know what made some producer or some director pick up that title, but they picked it up and said, wow, this really resonates and I want to bring this to life.

So yes, I do think that the likelihood is things -- titles have a bit of heat on them when they first come out. And the likelihood is that, yes, I mean, like they're probably going to make movies based on what's the best seller now versus what was the best seller in 2002.

Like I don't know what was the best-selling book in 2002. But aside from Harry Potter, like I assume they're not turning those into movies and TV shows.

They're probably picking out what's a big Colleen Hoover title that from the last 2 or 3 years. So I think that's typical.

But that said, I do think that we have a really rich IP library. It's diversified.

It focuses on different genres, reaches different audiences. So there's cyclicality in terms of what's in vogue and bell bottoms come in style and go out of style.

And so I do think that there will be titles that will come around from time to time. But I would mostly expect that the interest will be on new titles and less on old titles.

Again, I can be proven wrong that would just be my expectation.

Right. Would you say that you're being approached more in terms of push and pull, would you say that you're being approached more than approaching others?

I wouldn't say that. I would say we're pretty active in the market and going out and pounding the pavement and putting titles in front of studios.

My -- I haven't been doing this all that long, I don't want to speak like I have 30 years of experience when I don't. But in my experience, there is a certain level of immediacy and interest when the interest is inbound versus outbound.

So like we can go out and pedal the title, but like we're like everybody else who's pedaling the title. So if we go in front of, I don't know, pick your studio, Paramount, DreamWorks, 100 other studios internationally, like everybody is going out and trying to share their stories, whether it's us or comic companies in the United States or book publishers or Manga publishers trying to get in front of Amazon and Netflix, there's a lot of choices, and it's hard to break through the noise I would say when someone comes to us because the title resonated or just because somehow it got the interest of a director, producer, et cetera, we found that those are -- it's more effective.

I mean, I guess that says something probably about psychology, like people are -- it's better for people to convince themselves than for us to convince them. But I have found that when the interest is inbound, it seems to be more likely to be consummated than when it's us trying to go out and push.

I just have 2 other questions, and then I'll get back in the queue. The -- also in the disclosure, you talked about expansion in terms of role playing games and beverages.

I mean there's all kinds of -- there's all -- and we've talked in the past about podcasts, et cetera. And I want to sort of pull this into a question with regard to a news item about a week or so ago that OpenAI was creating or is creating an animated movie called Critterz.

So we can fold AI and sort of animation into that. And the AI and the animation may get back to what we were talking about before with respect to production or asset-light production.

But what -- I mean, can you speak to these -- it was a previous question, these potential or possible sort of avenues of diversification?

Yes, I mean like -- I mean, look, the -- somebody asked me, I forget when it was a while back that said, no, so IDW is a comic publisher. And I said, well, no, we publish comics.

I mean that's one of the things we do. And maybe it's the thing that we're best at.

It's one of our core competencies, but that really doesn't define the company. What we really do is we service fans.

And so if we have the ability to service fans in a way that maybe is even a better business than comics or maybe it's a complementary business, we should be pursuing those avenues. So role playing games is one where IDW historically hasn't done role playing games or at least not for a very long time.

And we were looking at ways that we could service our fan audience. And one of the things that came up was role playing games.

And even though we were having that conversation around IDW creator-owned titles, we said, well, why don't we apply that same logic to licensed titles. And so we did.

And so we're working on role playing games. When Wynonna was coming back for a special on Tubi, and we wanted to find a way to service that fan audience, the [ Earpers ], we talked about should we do another graphic novel.

And it just kind of felt like it had been done and it didn't really speak to the fans in an authentic way to that fan audience. And we said, you know what, Wynonna is a bad a**, young heroin who in the show, drinks whiskey, lives authentically, like let's try doing something at no one -- and so when I pitched it, like let's make a whiskey, that's crazy.

We can't possibly do that. I said, I think the fans would really like it, and they did.

I mean we sold out -- we should have ordered 10x as much. But -- so in terms of -- I think we're looking for new ways to engage fan audiences in a way that's most authentic to the audience and in a way that provides a diversification for our business at the same time.

So we're looking at plushies, we're looking at keychains. We're looking at sticker books.

So different -- but it could be video games. It could be clothing, it could be food and beverage.

It could be any fan experiences. So depending on the title, depending on the fan audience, I think not limiting ourselves to comics and to books, but thinking about what's the way to give the fans the best experience and the best way for them to engage with the titles that they love.

So like everything is on the board as far as I'm concerned, whether it's sneakers or hockey jerseys or a cruise or your trip to an island, like anything is on the table. We just have to approach it with the right business plan.

But I think we've demonstrated with the spirits, and I think we'll demonstrate with some other products in the coming, I'd say, quarters, if not months, some other new business opportunities that I think will demonstrate that we can produce new SKUs that are engaging for fans, that are fun for fans and that are potentially even a better business opportunity for IDW because they're easier to replicate than another comic and another book, and they have better gross margin for the company. So finding that sweet spot of what works for the fans and what works for the company, like it's a great privilege to be in a business where doing what is great for our customers is also -- hopefully is good for our business as well.

Yes. And it sounds a little bit like a Marvel model, right?

I mean, publishing and then also a variety of other -- I'm thinking more about licensing, whether it's a push toys or things like that. And [Audio Gap] $70 book value.

I guess the stock is $40, give or take. And with the reverse split, I mean there's really extremely limited liquidity.

I mean how do you think about -- and you're an owner of stock. How do you think about over time, having the stock reflect the balance sheet today, but also the fundamentals of the business, which hopefully will improve significantly over the next couple of years.

I mean, given the fact that there aren't many shares out there, I mean, how do you -- I mean, how do you think about having the stock reflect these things? Because clearly, today, it's not reflecting the value on the balance sheet.

And maybe you can -- again, I don't know how much you can say about this, but as a shareholder for a while, I'm interested in how you think about that.

Look, I'm in hopefully a similar, if not the same boat as the rest of the shareholders of IDW. So I personally find the equity market at times perplexing, sometimes inefficient, especially when you get into the [indiscernible] of the market.

So dealing in a company that is a controlled company that is heavily concentrated in terms of ownership I'd say, almost incredibly illiquid, that's like a [indiscernible] credit to the market. And so I don't -- I do not personally believe that there's a great degree of market efficiency and accurate valuation of IDW stock relative to competitors who wouldn't have that -- wouldn't be as nuanced in terms of the concentration or the ownership.

So look, at the end of the day, there's -- like there are only so many ways to achieve value for a company, whether it's a sale or selling equity or -- so I think the things that IDW has done in terms of delisting, like I don't think that they've decreased value. I just don't think that it's made much of a difference because the interest is so, I don't know, bare bones.

I mean this is probably the most engaged conversation we've had on an investor call in the 2-plus years that I've been here and no knock on anybody. That's just my observation.

And this is you and I talking for all I know, everyone else on the call is enthused by this, but it's possible everyone is falling asleep. And...

I've had effect before.

No, no, it's definitely not you, it's me. But I'm saying for the dozens or hundreds of potential shareholders, like most are not even listening in or not -- like I imagine there are many, many shareholders that don't even know what's going on with the company, and they might even be material shareholders.

Like that -- to me, that's somewhat of an inefficient market. So the question is that what's the best way for us to serve our shareholders.

Ultimately, over time, it's to create value. I think the best way to create value are to grow the business, grow the revenue, grow the IP library, grow our diversification, grow our entertainment presence.

Like every day, when I come into work, I'm not thinking like how do I get the stock price incrementally higher because I can't control the public markets. I can do whatever I can with our team to try and make the company as strong as possible because I do ultimately believe that's the best way to create value is to create a strong and diversified and profitable business.

So we're going to keep doing that. And I do think at some point, reality will catch up.

Like do I think it's going to happen in the next month? Like probably not.

So I think it will happen in the next 6 months or 12 months or 18 months, like the further out you get, the more likely it is just because I have a recency bias to think that like when I came in, the company was like quarters away from insolvency and we turned the ship around and have more money in the bank and the stock price basically hasn't moved. And like what does that tell me?

It tells me that no one really cared much one way or the other, which to me is crazy because like how could you not care if somebody is about to go to business. And now we have -- we're confident that we're going to have free cash flow for the next few years and that the business is growing and diversifying, and we feel like that we're at the strongest point we've been in the last decade and the stock price doesn't reflect it.

So to me, that's just -- it's an inefficient market. But like take it with a grain of salt.

Obviously, I want the stock price to go up. And when it doesn't, I'll come up with whatever my own interpretation is that fits my subjective desire for how the world should look.

I hope it's objectives, but I think it's an inefficient market. And I think over time, as we perform, the market will catch up.

We'll keep sharing the story. But at some point, like I think it's more confident that IDW is going to stay stagnant or that we're going to be worth 2 or 3x or 10x what we're, like I would bet on the latter.

And I am betting on the latter. That's why I'm putting my -- that's why I take my compensation in equity because I think this is crazy.

Like I would do this all day long because I think that this company is going to become more and more valuable. I think we have a tremendous leadership team, a tremendous team across the board.

So I just think -- I think it's a great opportunity to own a stake in a company that's on the rise. The fact that the market doesn't recognize that I'm like, well, who am I have criticized the market?

That's -- I'm very close to it. And I bet on myself and I bet on my team.

That's the direction I think we're going in.

Well, for whatever it's worth, I think your appraisal is spot on. And I certainly hope you're right about the future, which, of course, we'll see.

But I think from an outsider's point of view, I think the comments you made are certainly reasonable. Thanks a lot for entertaining my questions.

Thank you and I will give you the number of my therapist.

I had a question. I know The Last Ronin, film maker.

Is that still going to happen? I know because on Skydance bought Paramount and I guess they're also trying to buy Warner Bros now, too.

So that was still going to happen?

I wouldn't say your guess is as good as mine because in theory, my guess should be slightly better just because I'm a little closer to it. But it's not our decision to make.

I mean I think that there -- Paramount announced that The Last Ronin, which has been a best-selling graphic novel and also like 2 years now. It's top of the graphic novel charts for comic books.

Tremendous story. We've already put out a second edition.

In last years, we put out the third edition, which was the second book in Revolution. The sales numbers are great.

I mean like we've -- I think we've sold over 1 million copies, including comics of The Last Ronin. We sold between last years and The Last Ronin, and Revolution probably over 300,000 copies, maybe closer to 400,000 or 500,000 copies, like I have to look at -- I mean it's a monster of a title.

It is a rethinking of one of the most major franchises in the history of entertainment and gives new opportunity for the turtles to just have another 40 years and another 40 years. So I do think it's going to happen.

It was announced that it would be in '26 and then it was '27 and then it was '26 and so at this point, we don't have a firm date on when The Last Ronin live action movie will happen. I can just tell you, we are certainly rooting for it to happen because we think it's a great title.

We think it would be a great service to the fans. And we think it would be great for IDW because the notoriety of that movie, we think, would certainly boost sales of the book, obviously, the foundational book of The Last Ronin as well as the follow-on books of lost years and Revolution.

All right, which is a long way of saying, I don't know.

I should just say I don't know.

This has been a really important call. Two questions really.

A, within the comm sector, strategically, where do you think the greatest opportunity for audience growth is for IDW? And b, expanding on your previous comment on IDW really focusing more on servicing spend.

Besides [indiscernible] are there any other product categories that you guys are particularly excited about going after that presents more market growth or expansion...

Let me just try to take the questions one at a time. So the first one is other growth areas.

Look, in terms of -- on the licensing side of the business, which is from a revenue perspective, the lion's share of IDW's business, we're always looking at new potential licenses to diversify our portfolio. Some of those are -- some of the licenses that I think are very interesting are gaming adjacent licenses.

Just at the gaming community and the comics community, there's a lot of overlap, but also the commitment of the fans to the titles for the gaming industry, sometimes it runs deeper than just sort of a popular culture phenomenon. So those are some of the ones that I'd say are particularly interesting.

But then it's also just things that are hugely popular, whether it's things that have been comics or have never been comics, maybe they have movie franchises that are coming up, they have collaborations that we just know that they're going to be something that's recognizable to consumers the world over. So I'd say there will be diversification.

My expectation is that we will diversify our license offerings. Hopefully, that gives a little bit of a glimpse.

Then in terms of our originals, we've kind of staked the position on some of the different verticals that we think particularly resonate with fan audiences that we want to have an ownership stake in. So the 3 that we've identified to date are IDW Dark, which is our Horror imprint; IDW Heroes, which is our IDW Superheroes imprint and IDW Crime, which is our Crime imprint and then one that's -- the fourth one is IDW Legends, which is focusing on Bible stories and characters from the Bible.

But I believe that there are other imprints that will unroll in the future that we believe represents an opportunity to grow our market share. In terms of different ways that we can engage fan audiences, one of the things that we've been working on diligently is our spirits program.

We find that to be a highly diversified offering. Our ability to bring high-quality spirits and to work with partners to create special moments for fans, to bring talent on board.

It's just -- it's not something that anybody can just decide to make a T-shirt or a look-alike baseball cap. So I'd say we want to find things that require a degree -- a higher degree of investment and creative input than just taking a picture and slapping it on a print on demand.

Not that we won't do that, too. I think we'll do that, too, and try to make sure it's the highest quality, the highest quality pictures, highest quality fabric, et cetera.

But I'd say the areas that we want to diversify in, we want to be distinctive in our ability to offer -- to bring value add. So to date, I'd say the 2 areas that we've really -- or maybe 3 areas that we've really identified are role playing games, spirits and plush.

But I think that, that will be an evolving a [indiscernible] amount of different ways that we'll try to create opportunities through fans to engage with the titles that they love.

That makes a lot of sense. I appreciate the answers.

A quick follow-up question if there's time. I agreed, I think video games are probably one of the biggest licensed areas that's untapped in the comic sector that a lot of audience growth profitably.

Your interest in expanding to other product lines is also interesting. Do you foresee combining those 2, i.e., creating a imprint that is specific to video games, getting licenses to do mini series on that title and maybe even selling merchandise associated with it at that point?

Well, if we do it, I'll just stay with my idea, and I won't give you any credit. No, I think that that's an interesting idea.

I mean when we try to get a new license, whether it's for video game or otherwise, we're trying to get the rights that we think we can monetize and bring value to fan audiences. So -- but I don't think that we -- I think when we thought about imprints, we thought about it more in terms of imprints where we can have control over the storytelling, over the narrative over the characters, the universe, et cetera.

So we haven't really thought of a game imprint just because I think if we were looking at a successful video game, we would just view that as license writ large and sort of put it next to Ninja Turtles and Street Charts and Monster High and Star Trek and everything else that we license. But I think your point is an interesting point thing for us to consider that maybe we do need to think about being more focused even within our licensing that maybe we need to treat games as a separate area of licensing that we can bring additional value beyond publishing.

It's an interesting point. And I think I can confidently say that, that's not one that we've really considered to date, but I think it's a great idea.

If there's an opportunity for us to help out with that, I'd love to explore that. I'd love to get a better e-mail.

That is something we're helping other companies do at this point with the...

Awesome. Thank you for the offer.

And I think my information is on our investor materials. So please feel welcome to reach out.