CTM MEDIA HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	26-4831346
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

11 Largo Drive South, Stamford, Connecticut	06907
(Address of principal executive offices)	(Zip Code)

(203) 323-5161

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)		Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ¨ No x

As of ~~June 14,~~December 13, 2010, the registrant had the following shares outstanding:


Class A common stock, $0.01 par value:	1,106,468 shares outstanding (excluding 178,517 treasury shares)
Class B common stock, $0.01 par value:	6,126,267 shares outstanding (excluding ~~794,128~~797,183 treasury shares)
Class C common stock, $0.01 par value:	1,090,775 shares outstanding

CTM MEDIA HOLDINGS, INC.

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION		32

Item 1.	Financial Statements.	2

	Condensed Consolidated Balance Sheets as of October 31, 2010 (unaudited) and July 31, 2010.	2

	Condensed Consolidated Statements ~~(Unaudited)~~of Operations (unaudited) for the three months ended October 31, 2010 and 2009.	3

	~~Condensed Consolidated Balance Sheets~~	3

	Condensed Consolidated Statements of ~~Operations~~ Cash Flows (unaudited) for the three months ended October 31, 2010 and 2009.	4

	~~Condensed Consolidated Statements of Cash Flows~~	5

	Notes to Condensed Consolidated Financial Statements (unaudited).	65

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations .	129

Item 3.	Quantitative and Qualitative Disclosures ~~About~~about Market ~~Risk~~ Risk.	2016

Item ~~4T.~~4.	Controls and ~~Procedures~~ Procedures.	2016

PART II. OTHER INFORMATION		2116

Item 1.	Legal ~~Proceedings~~ Proceedings.	2116

Item 1A.	Risk ~~Factors~~ Factors.	2116

Item 2.	Unregistered Sales of Equity Securities and Use of ~~Proceeds~~ Proceeds.	2116

Item 3.	Defaults Upon Senior ~~Securities~~ Securities.	2116

Item 4.	(Removed and ~~Reserved~~ Reserved)	2116

Item 5.	Other ~~Information~~ Information.	2117

Item 6.	~~Exhibits~~ Exhibits.	2217

SIGNATURES		2318

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements ~~(Unaudited)~~

CTM MEDIA HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


(in thousands)	April 30, 2010			July 31, 2009			October 31, 2010			July 31, 2010
	(Unaudited)			(Note 1)
Assets							(Unaudited)
Current assets:
Cash and cash equivalents	$	5,800		$	6,480		$	6,435		$	6,516
Short term investment		1,029			1,024			1,030			1,030
Trade accounts receivable, net		2,504			3,908			3,514			3,496
Inventory – finished goods		1,451			1,405
Inventory – Finished goods								1,585			1,462
Prepaid expenses		864			982			904			965
Assets of discontinued operations		2,224			2,350
Note – receivable – current portion								415			321
Total current assets		13,872			16,149			13,883			13,790
Property and equipment, net		2,109			2,392			2,061			2,013
Licenses and other intangibles, net		27			89			9			17
Note receivable – non-current portion								2,325			2,400
Other assets		181			159			181			181
Total assets	$	16,189		$	18,789		$	18,459		$	18,401
Liabilities and equity (deficit)
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable	$	945			1,024		$	1,112		$	1,187
Accrued expenses		2,288			2,050			1,499			1,539
Deferred revenue		1,769			1,731			1,323			2,035
Due to IDT Corporation		—			24,921			44			38
Income tax payable								822			770
Dividends payable								999			-
Capital lease obligations—current portion		229			222			244			227
Other current liabilities		480			563			440			646
Total current liabilities		5,711			30,511			6,483			6,442
Capital lease obligations—long-term portion		348			529			373			286
Total liabilities		6,059			31,040			6,856			6,728
Commitments and contingencies					—
Equity (deficit):
CTM Media Holdings, Inc. stockholders’ equity (deficit):
Preferred stock, $0.01 par value; authorized shares—10,000; no shares issued		—			—
Class A common stock, $0.01 par value; authorized shares—35,000; 1,285 shares issued and 1,106 shares outstanding at April 30, 2010		13			—
Class B common stock, $0.01 par value; authorized shares—65,000; 6,920 shares issued and 6,126 shares outstanding at April 30, 2010		69			—
Class C common stock, $0.01 par value; authorized shares—15,000; 1,091 shares issued and outstanding at April 30, 2010		11			—
Stockholders’ Equity:
CTM Media Holdings, Inc. stockholders’ equity:
Preferred stock, $.01 par value; authorized shares—10,000; no shares issued at October 31, 2010 and July 31, 2010								—			—
Class A common stock, $0.01 par value; authorized shares—35,000; 1,285 shares issued and 1,106 shares outstanding at October 31, 2010 and July 31, 2010								13			13
Class B common stock, $0.01 par value; authorized shares—65,000; 6,923 shares issued and 6,126 shares outstanding at October 31, 2010 and July 31, 2010								69			69
Class C common stock, $0.01 par value; authorized shares—15,000; 1,091 shares issued and outstanding at October 31, 2010 and July 31, 2010								11			11
Additional paid-in capital		58,936			33,141			57,662			58,548
Treasury Stock, at cost, consisting of 179 shares of shares of Class A and 794 shares of Class B at April 30, 2010		(1,070	)		—
Treasury Stock, at cost, consisting of 179 shares of shares of Class A and 797 shares of class B at October 31, 2010 and July 31, 2010								(1,070	)		(1,070	)
Accumulated other comprehensive income		113			124			149			117
Accumulated deficit		(48,744	)		(47,483	)		(45,526	)		(46,235	)
Total CTM Media Holdings, Inc. stockholders’ equity (deficit)		9,328			(14,218	)
Noncontrolling interests		802			1,967
Total equity (deficit)		10,130			(12,251	)
Total liabilities and equity	$	16,189		$	18,789
Total CTM Media Holdings, Inc. stockholders’ equity								11,308			11,453
Non-controlling interests								295			220
Total equity								11,603			11,673
Total liabilities and stockholders’ equity							$	18,459		$	18,401

See accompanying notes to condensed consolidated financial statements.

CTM MEDIA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended October 31,
(in thousands, except per share data)	2010			2009

Revenues	$	8,649		$	8,233
Costs and expenses:
Direct cost of revenues		3,761			3,748
Selling, general and administrative (i)		3,814			3,183
Depreciation and amortization		171			228
Bad debt		46			3
Total costs and expenses		7,792			7,162
Income from operations		857			1,071
Interest income (expense), net		15		(18		)
Other expense, net		(7	)		(7	)
Income from continuing operations before income taxes		865			1,046
Provision for income taxes		(68	)		(238	)
Income from continuing operations		797			808

Discontinued operations, net of tax: (Note 2)
Loss from discontinued operations		—			(132	)
Net Income		797			676

Less - net income attributable to non-controlling interests		(87	)		(158	)
Net income attributable to CTM Media Holdings, Inc.	$	710		$	518

Amounts Attributable to CTM Media Holdings, Inc. common stockholders:
Income from continuing operations		710			650
Loss from discontinued operations		—			(132	)
Net income attributable to CTM Media Holdings, Inc.		710			518
Basic and diluted income (loss) per share attributable to CTM Media Holdings, Inc. common stockholders:
Income from continuing operations	$	0.08		$	0.08
Loss from discontinued operations	$	—		$	(0.02	)
Net income per share	$	0.08		$	0.06

Weighted-average number of shares used in calculation of basic and diluted income per share:		8,323			7,848

Dividend declared per common share:	$	0.12		$	—

(i) Stock-based compensation included in selling, general and administrative expenses	$	112		$	19

See accompanying notes to condensed consolidated financial statements.

CTM MEDIA HOLDINGS, INC.

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(Unaudited)~~

Three Months Ended
April 30,

Nine Months Ended
April 30,

(in thousands, except per share data) 2010 2009 2010 2009

Revenues $ 6,832 $ 6,805 21,431 $ 22,497
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization) 3,605 3,603 10,587 10,553
Selling, general and administrative (i) 3,651 3,259 10,368 10,921
Depreciation and amortization 197 213 653 772
Bad debt 36 253 91 532
Impairment and severance charges - 72 - 32,124
Total costs and expenses 7,489 7,400 21,699 54,902
Loss from operations (657 ) (595 ) (268 ) (32,405 )
Interest expense, net (15 ) (9 ) (73 ) (36 )
Other (expense) income, net (156 ) 4 (160 ) 7
Loss from continuing operations before income taxes (828 ) (600 ) (501 ) (32,434 )
Benefit from (provision for) income taxes 49 138 (74 ) (19 )
Loss from continuing operations (779 ) (462 ) (575 ) (32,453 )

Discontinued operations net of tax: (Note 2)
Loss from discontinued operations (316 ) (1,333 ) (570 ) (1,745 )
Net Loss (1,095 ) (1,795 ) (1,145 ) (34,198 )

Less - net (loss) income attributable to non-controlling interests (36 ) - 115 (737 )
Net loss attributable to CTM Media Holdings, Inc.
(1,059 ) $ (1,795 ) (1,260 ) $ (33,461 )

Amounts Attributable to CTM Media Holdings common stockholders:
Loss from continuing operations (743 ) (462 ) (690 ) (31,716 )
Loss from discontinued operations (316 ) (1,333 ) (570 ) (1,745 )

Net loss attributable to CTM Media Holdings, Inc.
(1,059 ) $ (1,795 ) (1,260 ) $ (33,461 )

Basic and dilutive loss per share attributable to CTM Media Holdings, Inc. common stockholders:
Loss from continuing operations $ (0.13 ) $ (0.07 ) $ (0.11 ) $ (4.75 )
Loss from discontinued operations $ (0.05 ) $ (0.20 ) $ (0.09 ) $ (0.26 )
Net Loss $ (0.18 ) $ (0.27 ) $ (0.20 ) $ (5.01 )

Weighted-average number of shares used in calculation of basic and dilutive loss per share: 5,834 6,684 6,304 6,684

Dividend declared per common share: $ 0.25 - $ 0.25 -

~~(i) Stock-based compensation included in selling, general and administrative expenses~~

~~113~~

~~245~~

)

~~See accompanying notes to condensed consolidated financial statements.~~

~~CTM MEDIA HOLDINGS, INC.~~

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months ended April 30, (in thousands)	2010			2009
Three Months ended October 31, (in thousands)							2010			2009
Operating activities
Net loss	$	(1,145	)	$	(34,198	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Net income							$	797		$	676
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations		570			1,745			—			132
Depreciation and amortization		653			772			171			228
Provision for doubtful accounts receivable		91			532			46			3
Impairment charges		—			31,466
Stock-based compensation		245			(3	)		112			19
Change in assets and liabilities:
Trade accounts receivable		1,184			538			(27	)		1,360
Inventory, prepaid and other assets		68			(682	)		(84	)		(139	)
Trade accounts payable, accrued expenses, and other current liabilities		163			(135	)		(263	)		349
Deferred revenue		41			(576	)		(712	)		(511	)
Net cash provided by (used in) operating activities		1,870			(541	)
Investing activities
Net cash provided by operating activities								40			2,117
Investing activities:
Capital expenditures		(320	)		(454	)		(46	)		(62	)
Purchase of IDW noncontrolling interest		(414	)		—
Purchase of short-term investment		—			(1,018	)
Net cash used in investing activities		(734	)		(1,472	)
Financing activities
Dividend paid		(2,082	)		—
Repurchases of Class A and Class B common stock		(1,070	)		—
Distributions to holders of noncontrolling interests		(435	)		(340	)
Cash used in investing activities								(46	)		(62	)
Financing activities:
Distributions to holders of non controlling interests								(12	)		(435	)
Funding provided by IDT Corporation, net		2,372			1,122			—			2,107
Repayments of capital lease obligations		(186	)		(127	)		(63	)		(54	)
Net cash (used in) provided by financing activities		(1,401	)		655			(75	)		1,618
Discontinued operations
Discontinued operations:
Net cash used in operating activities		(412	)		(223	)		—			(251	)
Net cash used in investing activities		(3	)		—			—			(3	)
Net cash used in discontinued operations		(415	)		(223	)
Net cash provided by financing activities								—			264
Net cash provided by discontinued operations								—			10

Net decrease in cash and cash equivalents		(680	)		(1,581	)
Net (decrease) increase in cash and cash equivalents								(81	)		3,683

Cash and cash equivalents at beginning of period		6,480			5,590			6,516			6,480

Cash and cash equivalents at end of period	$	5,800		$	4,009		$	6,435		$	10,163

Supplemental schedule of non cash investing and financing activities
Cash paid for interest							$	8		$	10
Purchases of property and equipment through capital lease obligations	$	-		$	95		$	166		$	—
Dividends payable							$	999		$	—

The effect of exchange rate changes on cash and cash equivalents is not material.

See accompanying notes to condensed consolidated financial statements.

CTM MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of CTM Media Holdings, Inc. and its subsidiaries (the “Company” or “Holdings”) have been prepared by Management in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting principally of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three ~~and nine~~ months ended ~~April 30,~~October 31, 2010 are not necessarily indicative of the results that may be ~~expected~~exp ected for the fiscal year ending ~~July 60;~~July 31, ~~2010.~~2011. The balance sheet at July 31, ~~2009~~2010 has been derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, ~~2009,~~2010, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal ~~2010~~2011 refers to the fiscal year ending July 31, ~~2010)~~2011).

~~On August 1, 2009, the Company adopted the accounting standard relating to noncontrolling interests in consolidated financial statements (see Note 11).~~

~~The Company consists~~Holdings is a holding company consisting of the following principal businesses:

CTM Media Group (“CTM”), the Company’s brochure distribution company and other advertising-based product initiatives focused on small to medium sized businesses; and

The Company’s majority interest in Idea and Design Works, LLC (“IDW”), which is a comic book and graphic novel publisher that creates and licenses intellectual property.

~~The Company~~Holdings was formerly a subsidiary of IDT Corporation (“IDT Corporation” or “IDT”) formed on May 8, 2009. On September 14, 2009, ~~the Company~~Holdings was spun-off by IDT to its stockholders and became an independent public company (the “Spin-Off”). IDT transferred its ownership in all of the entities that became ~~the Company’s~~Holdings’ consolidated subsidiaries to Holdings prior to the Spin-Off. The entities that became direct or indirect subsidiaries of the ~~Company~~Holdings are: CTM; Beltway Acquisition Corporation; IDT Local Media, Inc. (which conducted certain operations related to CTM with only the Local Pull business currently still active) and IDT Internet Mobile Group, Inc. (“IIMG”). IIMG ~~owns~~had owned approximately ~~77%~~53% of the equity interests in ~~IDW (see Note 10 for~~IDW. On November 5, 2009, the ~~purchase of~~Company purchased an additional 23.33 5% interest in ~~IDW).~~IDW for a purchase price of $0.4 million in cash. As a result of the transaction, the Company owns a 76.665% interest in IDW. The acquisition was accounted for in the second quarter of fiscal 2010, as an equity transaction, in accordance with the accounting standards on non-controlling interests. All ~~indebtedne ss~~indebtedness owed by any of these entities to IDT Corporation or its affiliates was converted into a capital ~~contribution.~~contribution prior to the Spin-Off. All references to the Company, its assets and results of operations for periods prior to the actual formation of the Company, refer to the subsidiaries of IDT that are now ~~or were,~~ owned by the Company, and their consolidated assets and results of operations.

~~The Company’s~~Holdings’ authorized capital stock currently consists of (a) 35 million shares of Class A common stock, (b) 65 million shares of Class B common stock, (c) 15 million shares of Class C common stock, and (d) 10 million shares of Preferred Stock. IDT Corporation completed the Spin-Off through a pro rata distribution of ~~the Company’s~~Holdings common stock to IDT Corporation’s stockholders of record as of the close of business on August 3, 2009 (the “record date”). As a result of the Spin-Off, each of IDT Corporation’s stockholders received: (i) one share of ~~the Company’s~~Holdings’ Class A common stock for every three shares of IDT Corporation’s common stock held on the record date; (ii) one share of ~~the Company’s~~Holdings’ Class B common stock for every three shares of IDT Corporation’s ~~Cla ss~~Class B common stock held on the record date; (iii) one share of ~~the Company’s~~Holdings’ Class C common stock for every three shares of the IDT Corporation’s Class A common stock held on the record date; and (iv) cash from IDT Corporation in lieu of a fractional share of all classes of ~~the Company’s~~Holdings’ common stock. On September 14, 2009, as a result of the Spin-Off, ~~the Company~~Holding’s had 1.3 million shares of Class A common stock, 5.1 million shares of Class B common stock and 1.1 million shares of Class C common stock issued and outstanding.

On October 19, 2010, the Company’s Board of Directors passed resolutions to amend (the “Amendment”) the Company’s Second Restated Certificate of Incorporation to decrease the authorized number of shares of (i) Class A common stock from 35 million shares to 6 million shares, (ii) Class B common stock from 65 million shares to 12 million shares, (iii) Class C common stock from 15 million shares to 2.5 million shares, and (iv) Preferred Stock from 10 million shares to 500,000 shares. The Amendment was approved on November 12, 2010, by written consent of the holders of a majority of the shares of each class of the Company’s outstanding capital stock, holding shares of the Company’s common stock (which included 560,234 shares of Class A common stock, 3,573,472 shares of Class B common sto ck and 1,090,775 shares of Class C common stock which are convertible into shares of Class A common stock on a 1-for-1 basis), representing approximately 50.1%, 58%, and 100%, respectively of the combined voting power of the Company’s outstanding Class A, Class B and Class C common stock, as of October 29, 2010. An Information Statement disclosing the Amendment and its approval was mailed to stockholders on or about November 29, 2010 and the Amendment will become effective on December 20, 2010, which is at least twenty days after mailing of the Information Statement.

Prior to the Spin-Off, IDT Corporation provided certain services to the entities that became Holdings’ consolidated subsidiaries. Holdings and IDT Corporation entered into a Master Services Agreement, dated September 14, 2009, pursuant to which IDT Corporation continues to provide to Holdings, among other things, certain administrative and other services. In addition, pursuant to the Master Services Agreement, IDT Corporation provides certain additional services to Holdings, on an interim basis. Such services include assistance with periodic reports required to be filed with the SEC, as well as maintaining minutes, books and records of meetings of the Board of Directors, Audit Committee and Compensation Committee, as well as assistance with corporate governance. The cost of these additional services are not included in Holdings’ historical results of operations for the period prior to the Spin-Off, as they were not applicable for periods that Holdings was not a separate public company.

Note 2—Discontinued Operations

Sale of assets of WMET Radio

On May 5, 2010, the Company consummated the sale of substantially all of the assets used in the WMET radio station business (other than working capital) ~~for~~. WMET 1160 AM is a radio station serving the Washington, D.C. metropolitan area. The sale price offor the WMET assets was $4 million in a combination of cash and a promissory note of the buyer that is secured by the assets sold. $1.3 million of the purchase price was paid in cash at the closing and the remainder ~~will be paid~~is owed pursuant to a two-year promissory note, which is extendable in part to three years at the option of the buyer. The sale met the criteria to be reported as a discontinued operation in the third quarter of fiscal 2010 and accordingly, WMET’s results are classified as part of discontinued ~~operations.~~operations during the fiscal year 2010.

Summary Financial Data of Discontinued Operations

Revenues ~~(loss) income~~and loss (in millions) before income taxes ~~and net (loss) income~~ of WMET, which are included in discontinued operations, were as follows:

	Three Months Ended April 30,						Nine Months Ended April 30,						Three Months Ended October 31,
	2010			2009			2010			2009			2010		2009
	(in thousands)
Revenue	$	56		$	286		$	407		$	894		$	—	$	0.2
Loss before income taxes and net loss .		(316	)		(1,333	)		(570	)		(1,745	)
Loss before income taxes and net loss														—		(0.1	)

On November 17, 2009, the Company commenced a tender offer to purchase up to thirty percent of its outstanding common stock. The Company offered to purchase up to 0.4 million shares of its Class A common stock ~~or any lesser number of Class A shares that stockholders properly tendered in the tender offer,~~ and up to 2.4 million shares of its Class B common stock, ~~or any lesser number of Class B shares that stockholders properly tendered in the tender offer,~~ at a price per share of ~~$1.10, for a maximum aggregate purchase price of $3.1 million.~~$1.10. The offer expired on December 22, ~~2009. As a result,~~2009 and pursuant to the offer, the Company repurchased 0.2 million shares of Class A common stock and 0.8 million shares of Class B common stock for an aggregate purchase price of $1.1 million, representing approximately 14% of its total outstanding capital stock at the ~~t ime.~~time.

~~On Feb 23, 2010, the~~The Company ~~announced that its Board of Directors approved the payment of~~paid a cash dividend in the amount of $0.25 per share (approximately $2.1 million in the aggregate) ~~which was paid~~, $0.06 per share (approximately $0.5 million in the aggregate), and $0.12 per share (approximately $1 million in the aggregate), on March 15, 2010, June 15, 2010 and November 9, 2010, respectively, to stockholders of record as of March 8, 2010, May 3, 2010 and November 1, 2010, respectively, of the Company’s Class A, Class B and Class C common stock.

The declaration of any future dividend will be ~~paid on or about June 15, 2010 to stockholders of record as of May 3, 2010~~at the discretion of the Company’s ~~Class A common stock, Class B common stock~~Board of Directors and ~~Class C common stock.~~will depend on the Company’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Company’s Board of Directors that dividends are in the best interest of the Company’s stockholders.

Basic earnings per share is computed by dividing net income ~~(loss)~~ attributable to all classes of common stockholders by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include non-vested restricted stock using the treasury stock method, unless the effect of such increase is anti-dilutive.

As part of the Spin-Off, holders of restricted stock of IDT Corporation received, in respect of those restricted shares, one share of the Company’s Class A common stock for every three restricted shares of common stock of IDT Corporation that they owned as of the record date of the Spin-Off and one share of the Company’s Class B common stock for every three restricted shares of Class B common stock of IDT Corporation that they owned as of the record date of the Spin-Off. Those particular shares of the Company’s stock are restricted under the same terms as the corresponding IDT Corporation restricted shares in respect of which they were issued. Upon completion of the Spin-Off on September 14, 2009, there were 0.3 million shares of Class A unvested restricted stock and 0.5 million shares of Class B unvested ~~restric ted stock.~~restricted s tock.

On October 14, 2009, the Company’s Board of Directors granted its Chairman and founder, Howard S. Jonas, 1.8 million restricted shares of the Company’s Class B common stock with a value of $1.25 million on the date of grant in lieu of a cash base salary for the next five years. The restricted shares will vest in equal thirds on each of October 14, 2011, October 14, 2012 and October 14, 2013. This arrangement does not impact Mr. Jonas’ cash compensation from the date of the Spin-Off through the pay period including the grant date. Total unrecognized compensation cost on the grant date was $1.25 million. The unrecognized compensation cost is expected to be recognized over the vesting period from October 14, 2009 through October 14, 2014. In the three and nine months ended April 30, 2010, the Company’s Stock-b ased compensation included in selling, general and administrative expenses was $0.1 million and $0.2 million, respectively. On September 3, 2009, the Company’s Compensation Committee ratified the Company’s 2009 Stock Option and Incentive Plan (the “Company’s Stock Option and Incentive Plan”), which was previously adopted by the Company’s Board of Directors and approved by IDT Corporation as ~~its~~the Company’s sole stockholder, to provide incentives to executive officers, employees, directors and consultants of the Company and/or its subsidiaries. The maximum number of shares of the Company’s Class B common stock reserved for the grant of awards under the Company’s Stock Option and Incentive Plan is 383,020, subject to adjustment. Incentives available under the Company’s Stock Option and Incentive Plan may include stock options, stock appreciation rights, limited stock appreciation rights, restricted ~~stock,~~sto ck, and deferred stock units.

Under the Company’s Stock Option and Incentive Plan, the option price of each option award shall not be less than one hundred percent of the fair market value of the Company’s Class B common stock on the date of grant. Each option agreement shall provide the exercise schedule for the option as determined by the Compensation Committee. The exercise period will be ten years from the date of the grant of the option unless otherwise determined by the Compensation Committee. No awards have been granted under the Company’s Stock Option and Incentive Plan to date.

The Company repurchased $1.1 million of its Class A and Class B common stock in the second quarter ended January 31, 2010 in connection with the tender offer that expired on December 22, 2009.

Comprehensive income ~~(loss)~~ consists of net income ~~(loss)~~ and other gains and losses affecting equity that, under generally accepted accounting principles are excluded from net income. Changes in the components of other comprehensive income ~~(loss)~~ are described below.

The Company has the following two reportable business segments: CTM and IDW. CTM consists of ~~our~~the Company’s brochure distribution company and other advertising-based new product initiatives focused on small to medium sized businesses. IDW is a comic book and graphic novel publisher that creates and licenses original intellectual property.

The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker.

The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its business segments based primarily on operating ~~income (loss).~~income. There are no other significant asymmetrical allocations to segments.

~~Prior~~Provision for income taxes for the three months ended October 31, 2010 and 2009 was $68,000 and $238,000 respectively. The decrease is due to the ~~Spin-Off, IDT Corporation,~~reduction in the ~~Company’s former parent company, charged~~provisions for federal, state and foreign income taxes. The reduction in the ~~Company~~provision for ~~certain transactions~~federal and ~~allocated routine expenses based on company specific items~~state income taxes amounts to $120,000 and is related to the ~~entities~~utilization of tax benefits that ~~became the Company’s consolidated subsidiaries.~~were created in periods subsequent to October 31, 2009. The ~~Company~~reduction in foreign tax expense amounts to $50,000 and ~~IDT Corporation entered into a Master Services Agreement, dated September 14, 2009, pursuant to which IDT Corporation will continue to provide~~is proportional to the Company, among other things, certain administrative and other services. In addition, pursuant to the Master Services Agreement, IDT Corporation will provide certain additional services to the Company, on an interim basis. Such services include assistance with periodic reports required to be filed with the SEC, as well as maintaining minutes, books and records of meetings of the Board of Directors, Audi t Committee and Compensation Committee, as well as assistance with corporate governance. The cost of these additional services are not includedreduction in foreign earnings in the Company’s historical results of operations for the period prior to the Spin-Off, as they were not applicable for periods that the Company was not a separate public company. In the three and nine months ended April 30, 2010, the Company’s selling, general and administrative expenses were $0.2 million and $1.1 million, respectively, for all services and allocated expenses charged by IDT Corporation to the Company. In the three and nine months ended April 30, 2009, the Company’s selling, general and administrative expenses were $0.8 million and $3.6 million, respectively, for all services and allocated expenses charged by IDT Corporation to the Company.corresponding periods.

In the second quarter of fiscal 2009, the following events and circumstances indicated that the fair value of certain of the Company’s reporting units may be below their carrying value: (1) a significant adverse change in the business climate, (2) operating losses of reporting units, and (3) significant revisions to internal forecasts. The Company measured the fair value of its reporting units by discounting their estimated future cash flows using an appropriate discount rate. The carrying value including goodwill of CTM and IDW exceeded their estimated fair values; therefore, additional steps were performed for these reporting units to determine whether an impairment of goodwill was required. As a result of this analysis, in the nine months ended April 30,On November 17, 2009, the Company ~~recorded goodwill impairment~~commenced a tender offer to purchase up to thirty percent of ~~$29.7~~its outstanding common stock. The Company concluded the tender offer and repurchased 0.2 million ~~in C TM~~shares of Class A common stock and ~~$1.8~~0.8 million ~~in IDW, which reduced~~shares of Class B common stock for an aggregate purchase price of $1.1 million, representing approximately 14% of its total outstanding capital stock at the ~~carrying amount of the goodwill in each of these reporting units to zero.~~time.

On November 5, 2009, the Company purchased an additional 23.335% interest in IDW for a purchase price of $0.4 million in cash. As a result of the transaction, the Company owns a 76.665% interest in IDW. The acquisition was was accounted for in the second quarter of fiscal 2010 as an equity transaction, in accordance with the accounting standards on ~~noncontrolling~~non-controlling interests. ~~The Company acquired the additional interests as it determined that the purchase price was reasonable as well as to reduce the number of noncontrolling interest holders in this business.~~

~~In September 2009, the Company adopted changes issued by the~~The Financial Accounting Standards Board (“FASB”) periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting. We have reviewed the recently issued pronouncements and concluded that no new standards were issued this quarter that applied to the authoritative hierarchy of U.S. GAAP. These changes establish the FASB Accounting Standards Codification™ (the “Codification”) as the source of authoritative U.S. GAAP for all non-governmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. The Codification did not change or alter existing U.S. GAAP. The adoption of these changes had no impact on the Company’s financial position, results of operations or cash flows.

In January 2010, the FASB ~~amended~~issued Accounting Standards Update (ASU) No. 2010-06, “Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”), which is included in the ~~accounting standard relating to fair value measurements primarily to improve the disclosures about fair value measurements in financial statements. The main provisions of the amendment require~~ASC Topic 820 (Fair Value Measurements and Disclosures). ASU 2010-06 requires new disclosures ~~about (a)~~on the amount and reason for transfers in and out of ~~the three levels of the~~Level 1 and 2 fair value ~~hierarchy~~measurements. ASU 2010-06 also requires disclosure of activities, including purchases, sales, issuances, and ~~(b) activity~~settlements within the Level 3 ~~of the hierarchy. In addition, the amendment clarifies existing disclosures about (1) the level of disaggregation of~~ fair value measurements ~~(2)~~and clarifies existing disclosure requirements on levels of disaggregation and disclosures about inputs and valuation ~~techniques~~techniques. Except for otherwise provided, ASU 2010-06 is effective for interim and ~~inputs used~~annual reporting periods beginning after December 15, 2009. The adoption of this standa rd did not have a material effect on the Company’s financial statements.

In February 2010, the FASB issued ASU No. 2010-09, “Amendments to ~~measure fair value,~~Certain Recognition and ~~(3) postretirement benefit plan assets. The Company was~~Disclosure Requirements” (“ASU 2010-09”), which is included in ASC Topic 855 (Subsequent Events). ASU 2010-09 clarifies that an SEC filer is required to ~~adopt these changes to its disclosures about fair value measurements on February 1, 2010, except for certain~~evaluate subsequent events through the date that the financial statements are issued. ASU 2010-09 was effective upon the issuance of the ~~disclosures about the activity within Level 3, which are required to be adopted on August 1, 2011. The Company does~~final update and did not ~~expect the adoption of these changes to its disclosures about fair value measurements to~~ have anany impact on ~~its~~the Company’s financial ~~position, results of operations or cash flows.~~statements.

The Company completed a review and analysis of all events that occurred after the balance sheet date to determine if any such events must be reported and has determined that there are no subsequent events to be disclosed.

The following information should be read in conjunction with the accompanying condensed consolidated financial statements and the associated notes thereto of this Quarterly Report, ~~on Form 10-Q,~~and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2009,~~2010, as filed with the ~~U.S. Securities and Exchange Commission (the “SEC”).~~SEC.

In accordance with Item ~~10(f)~~10-(f)(2)(ii) of Regulation S-K, we qualify as a “smaller reporting company” because our public float was below $75 million, calculated based on the actual share price on January 31, 2010, the ~~September 14, 2009 Spin-Off date~~last business day of its second fiscal quarter, and the aggregate number of shares distributed to non-affiliates. We therefore followed the disclosure requirements of Regulation S-K applicable to smaller reporting companies in this Quarterly Report on Form 10-Q.

As used below, unless the context otherwise requires, the terms “the Company,” “Holdings,” “we,” “us,” and “our” refer to CTM Media Holdings, Inc., a Delaware corporation, and our subsidiaries.

This Quarterly Report on Form 10-Q contains forward-looking statements. Statements that are not historical facts are forward-looking statements, ~~within the meaning of the Private Securities Litigation Reform Act of 1995,~~ Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, ~~including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,”~~ and ~~similar words and phrases. These~~such forward-looking statements are ~~subject~~statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include:

• statements about Holdings’ and its divisions’ future performance;

• projections of Holdings’ and its divisions’ results of operations or financial condition; and

• statements regarding Holdings’ plans, objectives or goals, including those relating to its strategies, initiatives, competition, acquisitions, dispositions and/or its products.

Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Readers are cautioned not to place undue reliance on these forward-looking statements and all such forward-looking statements are qualified in their entirety by reference to the following cautionary statements.

Forward-looking statements are based on Holdings’ current expectations, estimates and assumptions and because forward-looking statements address future results, events and conditions, they, by their very nature, involve inherent risks and uncertainties, many of which are unforeseeable and beyond Holdings’ control. Such known and unknown risks, uncertainties and other factors may cause Holdings’ actual results, performance or other achievements to differ materially from the anticipated results, performance or achievements expressed, projected or implied by these forward-looking statements.

These factors include those discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Holdings’ periodic filings made with the SEC.

Holdings cautions that ~~could~~such factors are not exhaustive and that other risks and uncertainties may cause actual results to differ materially from ~~the results projected~~those in ~~any~~ forward-looking ~~statement. In addition to the factors specifically noted in the forward-looking~~statements.

Forward-looking statements other important factors, risks and uncertainties that c ould result in those differences include, but are not limited to, those discussed under Item 1A to Part I “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended July 31, 2009. The forward-looking statements are madespeak only as of the date they are made and are statements of ~~this report~~Holdings’’ current expectations concerning future results, events and ~~we assume~~conditions and Holdings is under no obligation to update any of the forward-looking statements, whether as a result of new information, future events or ~~to update the reasons why actual results could differ from those projected in the forward-looking statements.~~otherwise. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2009.~~2010.

We are a former subsidiary of IDT ~~Corporation (“IDT”).~~Corporation. As a result of the Spin-Off, on September 14, 2009, we became an independent public company. ~~While many of the costs of being a public company were already borne by our business units – either directly or by allocation of corporate overhead from~~ IDT ~~– we now need~~Corporation continues to ~~incur additional costs for the infrastructure to perform the necessary accounting, internal control and reporting functions. We expect the annual incremental costs for these~~provide certain functions ~~to be between $600,000 and $700,000. A significant portion of these functions will be provided by IDT~~ pursuant to ~~the~~a Master Services Agreement, dated September 14, ~~2009, between us and IDT. In~~2009. During the three ~~and nine~~ months ended ~~April 30,~~October 31, 2010 ~~our selling, general~~ and ~~administrative expenses were $0.2 million and $1.1 million, respectively, for all services and allocated expenses charged by IDT to us. In the three and nine months ended April 30,~~ 2009, our selling, general and administrative expenses were ~~$0.8~~$0.1 million and ~~$3.6~~$.20.15 million, respectively, for all services and allocated expenses charged by IDT Corporation to us. At ~~April 30,~~October 31, 2010 ~~other current liabilities included~~and 2009 the amount owed to IDT Corporation was $0.1 million ~~due to IDT Corporation.~~and $0.2 million, respectively.

On November 17, 2009, wethe Company commenced a tender offer to purchase up to thirty percent of ~~our~~its outstanding common stock. ~~We offered to purchase up to 0.4 million shares of our Class A common stock, or any lesser number of Class A shares that stockholders properly tendered in~~The Company concluded the tender offer and up to 2.4 million shares of our Class B common stock, or any lesser number of Class B shares that stockholders properly tendered in the tender offer, at a price per share of $1.10, for a maximum aggregate purchase price of $3.1 million. The offer expired on December 22, 2009. In the tender offer, we repurchased 0.2 million shares of Class A common stock and 0.8 million shares of Class B common stock for an aggregate purchase price of $1.1 million, representing approximately 14% of ~~our then~~its total outstanding capital stock at the time.

On May 5, 2010, the Company consummated the sale of substantially all of the assets used in the WMET radio station business (other than working capital). WMET 1160 AM is a radio station serving the Washington, D.C. metropolitan area. The sale price for the WMET assets was $4 million in a combination of cash and a promissory note of the buyer that ~~time.~~is secured by the assets sold. $1.3 million of the purchase price was paid in cash at the closing and the remainder is owed pursuant to a two-year promissory note, which is extendable in part to three years at the option of the buyer. The sale met the criteria to be reported as a discontinued operation in the third quarter of fiscal 2010 and accordingly, WMET’s results are classified as part of discontinued operations during the fiscal year 2010.

Our principal businesses consist of:

CTM develops and distributes print and mobile-based advertising and information in targeted tourist markets. Throughout its operating region, CTM operates ~~five~~four integrated and complimentary business lines: Brochure Distribution, Publishing, RightCardTM, and Digital Distribution. CTM had operated its Design & Print ~~Publishing, RightCard~~TM~~, and Digital Distribution.~~business, which it exited at the beginning of the fourth quarter of fiscal 2010. CTM offers its customers a comprehensive media marketing approach through these business lines. In fiscal ~~2009,~~2010, CTM serviced over ~~3,000~~2,600 clients and maintained more than 11,000 display stations in over 3028 states and provinces in the United States (including Puerto Rico) and Canada. CTM’s display stations are located in travel, tourism and entertainment venues, including hotels and other lodgings, corporate and community venues, ~~transportation~~transporta tion terminals and hubs, tourist attractions and ~~e ntertainment~~entertainment venues. CTM’s revenues represented ~~60.1%~~58% and 60% of our consolidated revenues ~~from continuing operations~~ in the ~~nine~~three months ended ~~April 30,~~October 31, 2010 and ~~63.3% in the similar period in fiscal 2009.~~2009, respectively.

IDW is a comic book and graphic novel publisher that creates and licenses intellectual property. IDW’s revenues represented ~~39.9%~~42% and 40% of our consolidated revenues ~~from continuing operations~~ in the ~~nine~~three months ended ~~April 30,~~October 31, 2010 and ~~36.7% in the similar period in fiscal 2009.~~2009, respectively.

On November 5, 2009 we purchased an additional 23.335% interest in IDW for a purchase price of $0.4 ~~million in cash.~~million. As a result of the transaction, we own a 76.665% interest in IDW. ~~We acquired the additional interests as we determined that the purchase price was reasonable as well as to reduce the number of noncontrolling interest holders in this business.~~

We have the following two reportable business segments: CTM and ~~IDW are our reportable business segments.~~IDW.

The condensed consolidated financial statements for the periods ~~prior to the September 2009 Spin-Off~~ reflect our financial position, results of operations, and cash flows as if the current structure existed for all periods presented. The financial statements have been prepared using the historical basis for the assets and liabilities and results of operations.

Our condensed consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United ~~States (“U.S. GAAP”).~~States. Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for fiscal ~~2009.~~2010. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities. Critical accounting policies are those that require application of management’s most subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. Our critical accounting ~~policie s~~policies include those related to the allowance for doubtful accounts, goodwill and intangible assets with indefinite useful lives and valuation of long-lived assets including intangible assets with finite useful lives. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. For additional discussion of our critical accounting policies, see our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for fiscal ~~2009.~~2010.

We evaluate the performance of our operating business segments based primarily on income ~~(loss)~~ from operations. Accordingly, the income and expense line items below income ~~(loss)~~ from operations are only included in our discussion of the consolidated results of operations.

On October 14, 2009, our Board of Directors granted our Chairman and founder, Howard S. Jonas, 1.8 million restricted shares of our Class B common stock with a value of $1.25 million on the date of grant in lieu of a cash base salary for the next five years. The restricted shares will vest in equal thirds on each of October 14, 2011, October 14, 2012 and October 14, 2013. Unvested shares would be forfeited if we terminate Mr. Jonas’ employment other than under circumstances where ~~the~~ accelerated vesting applies. The shares are subject to adjustments or acceleration based on certain corporate transactions, changes in capitalization, or termination, death or disability of Mr. Jonas. If Mr. Jonas is terminated by us for cause, a pro rata portion of the shares would ~~vest.~~vest and the remainder would be forfeited. This arrangement does ~~not~~no t impact Mr. Jonas’ ~~ca sh~~cash compensation from the date of the Spin-Off through the pay period ~~ending on~~including the grant date. Total unrecognized compensation cost on the grant date was $1.25 million. The unrecognized compensation cost ishas been and expected to continue to be recognized over the vesting period from October 14, 2009 through October 14, 2014. The related stock-based compensation related to this grant in the first quarter of fiscal 2011 and 2010 was ~~$0.1 million~~$112 thousand and ~~$0.2 million for the three and nine months ended April 30, 2010,~~19 thousand, respectively.

We and IDT entered into a Tax Separation Agreement, dated as of September 14, 2009, to provide for certain tax matters including the assignment of responsibility for the preparation and filing of tax returns, the payment of and indemnification for taxes, entitlement to tax refunds and the prosecution and defense of any tax controversies. Pursuant to this agreement, IDT must indemnify us from all liability for taxes of ours and our subsidiaries for periods ending on or before September 14, 2009, and we must indemnify IDT from all liability for taxes of ours and our subsidiaries accruing after September 14, 2009. Also, for periods ending on or before September 14, 2009, IDT ~~has~~shall have the right to control the conduct of any audit, examination or other proceeding brought by a taxing authority. We shall have the right to participate ~~jointly~~jointl y in any proceeding that may affect our tax liability unless IDT has indemnified us. Finally, we and our subsidiaries agreed not to carry back any net operating losses, capital losses or credits for any taxable period ending after September 14, 2009 to a taxable period ending on or before September 14, 2009 unless required by applicable law, in which case any refund of taxes attributable to such carry back shall be for the ~~benefit~~account of ~~IDT.~~

CTM’s gross margin ~~percentage~~ increased in the three months ended ~~April 30,~~October 31, 2010 to ~~57.7% from 50.7%~~68.0% compared to 67.3% in the three months ended October 31, 2009. The increase was primarily due to ~~lower~~a shift in product mix to relatively higher margin distribution revenues ~~in the printing business which has~~from relatively lower ~~margins. CTM’s gross~~ margin percentage decreased to 60.5% in the nine months ended April 30, 2010 from 61.3% in the similar period in fiscal 2009. Since a significant portion of CTM’s cost of sales is fixed, the gross margin percentage decreases when revenues decrease. Additionally, there was an increase in gasoline and payroll costs during the nine months ended April 30, 2010 which negatively impacted the gross margin.printing revenues.

As a percentage of CTM’s aggregate revenues, selling, general and administrative expenses ~~decreased to 60.7% and 54.9%~~increased in the three ~~and nine months~~month ended ~~April 30,~~October 31, 2010 ~~respectively,~~to 54.0% from ~~61.0% and 59.1%~~46.9% in the three ~~and nine~~ months ended ~~April 30~~October 31, 2009, ~~respectively.~~

In an effort to increase availability of versions of its content at retail outlets, IDW has entered into a number of digital distribution agreements ~~this~~over the past calendar year, and IDW’s publications are currently available for purchase via mobile phones, primarily iPhones/iPod Touch. Various IDW titles are also available direct-to-desktop via several websites and ~~are available~~ on Sony’s PSP and PSP ~~Go.~~Go gaming devices.

IDW’s aggregate gross margin ~~decreased~~increased in the three ~~and nine~~ months ended ~~April 30,~~October 31, 2010 to ~~32.0% and 35.6%, respectively,~~38.9% from ~~42.2% and 38.9% in the similar periods in fiscal 2009. The decrease~~36.4% in the three ~~and nine~~ months ended ~~April 30,~~October 31, 2009. The increase in the three months ended October 31, 2010 was primarily due to the mix of ~~products.~~products and lower costs.

Historically, we satisfied our cash requirements primarily through cash provided by CTM’s operating activities and funding from IDT Corporation.

WeDuring the three months ended October 31, 2010 and 2009, we distributed cash ~~of $0.4 million in the nine months ended April 30, 2010 and $0.3 million in the similar period in fiscal 2009~~ to the minority shareholders of ~~IDW.~~IDW in the amount of $0.01million and $0.4 million, respectively.

We repaid capital lease obligations of ~~$0.2 million in the nine months ended April 30, 2010 and~~ $0.1 million in each of the ~~similar period in fiscal 2009.~~

We intend to, where appropriate, make strategic investments and acquisitions to complement, expand, and/or enter into new businesses. In considering acquisitions and investments, we search for opportunities to profitably grow our existing businesses, to add qualitatively to the range of businesses in our portfolio and to achieve operational synergies. Historically, such acquisitions have not exceeded $0.5 million, with the average acquisition being less than $0.1 million. If we were to pursue an acquisition in excess of $0.5 million we would likely need to secure financing arrangements. At this time, we cannot guarantee that we will be presented with acquisition opportunities that meet our return on investment criteria, or that our efforts to make acquisitions that meet our criteria will be successful.

In addition, we will utilize approximately $2 million annually to pay the regular quarterly dividends in the amount of $0.06 per share,, subject to confirmation by our management that there is sufficient surplus as of the proposed future payment dates and other circumstances existing at the relevant times.

Historically, we satisfied our cash requirements primarily through cash provided by CTM’s operating activities and funding from ~~IDT.~~IDT Corporation. The conversion of our balance due to IDT Corporation into a capital contribution ~~as well as the $2.0 million cash contribution by IDT~~ in September 2009 significantly improved our working capital balance. We do not currently have any material debt obligations. With the exit of certain lines of businesses within CTM, we expect that our operations in fiscal ~~2010~~2011 and the balance of cash, cash equivalents and short term investment that we held as of ~~April 30,~~October 31, 2010, will be sufficient to meet our currently anticipated working capital and capital expenditure requirements, capital lease obligations, make limited acquisitions and investments, pay the currently announced and any future declared dividends and fund any potential operating cash flow deficits within any of our ~~seg ments~~segments for at least the next twelve months. In addition, we anticipate that our expected cash balances, as well as cash flows from our operations, will be sufficient to meet our long-term liquidity needs. The foregoing is based on a number of assumptions, including that we will collect on our receivables, effectively manage our working capital requirements, and maintain our revenue levels and liquidity. Predicting these matters is particularly difficult in the current worldwide economic situation and overall decline in consumer demand. Failure to generate sufficient revenues and operating income could have a material adverse effect on our results of operations, financial condition and cash flows.

Revenues from our international operations represented ~~7.7%~~9.6% and ~~6.7%~~8.8% of our consolidated revenues for the ~~nine~~three months ended ~~April 30,~~October 31, 2010 and 2009, respectively. ~~A significant portion of these~~These revenues isare in ~~currencies other than the U.S. Dollar, primarily~~ Canadian ~~dollars and recently in Euros, although our revenues in Euros are not significant at this time.~~dollars. Our foreign currency exchange risk is somewhat mitigated by our ability to offset the majority of ~~these~~ non-U.S. Dollar-denominated revenues with operating expenses that are paid in the same currencies. While the impact from fluctuations in foreign exchange rates affects our revenues and expenses denominated in foreign currencies, the net amount of our exposure to foreign currency exchange rate changes at the end of each reporting period is generally not material.

We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

The Financial Accounting Standards Board (“FASB”) periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting. We have reviewed the recently issued pronouncements and concluded that no new standards were issued this fiscal quarter that applied to the Company.

In January 2010, the FASB ~~amended~~issued Accounting Standards Update (ASU) No. 2010-06, “Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”), which is included in the ~~accounting standard relating to fair value measurements primarily to improve the disclosures about fair value measurements in financial statements. The main provisions of the amendment require~~ASC Topic 820 (Fair Value Measurements and Disclosures). ASU 2010-06 requires new disclosures ~~about (1)~~on the amount and reason for transfers in and out of ~~the three levels of the~~Level 1 and 2 fair value ~~hierarchy~~measurements. ASU 2010-06 also requires disclosure of activities, including purchases, sales, issuances, and ~~(2) activity~~settlements within the Level 3 ~~of the hierarchy. In addition, the amendment clarifies existing disclosures about (1) the level of disaggregation of~~ fair value measurements ~~(2)~~and clarifies existing disclosure requirements on levels of disaggregation and disclosures about inputs and valuation ~~techniques~~techniques. Except for otherwise provided, ASU 2010-06 is effective for interim and ~~inputs used~~annual reporting periods beginning after December 15, 2009. The adoption of this standa rd did not have a material effect on the Company’s financial statements.

In February 2010, the FASB issued ASU No. 2010-09, “Amendments to ~~measure fair value,~~Certain Recognition and ~~(3) postretirement benefit plan assets. We were~~Disclosure Requirements” (“ASU 2010-09”), which is included in ASC Topic 855 (Subsequent Events). ASU 2010-09 clarifies that an SEC filer is required to ~~adopt these changes to our disclosures about fair value measurements on February 1, 2010, except for certain~~evaluate subsequent events through the date that the financial statements are issued. ASU 2010-09 was effective upon the issuance of the ~~disclosures about the activity within Level 3, which are required to be adopted on August 1, 2011. We do~~final update and did not ~~expect the adoption of these changes to our disclosures about fair value measurements to~~ have ana significant impact on ~~our~~the Company’s financial ~~position, results of operations or cash flows.~~statements.

Smaller reporting companies are not required to provide the information required by this item.

(in millions)	Three Months ended April 30,				Change						Nine Months ended April 30,				Change
	2010		2009					$		%		2010		2009				$		%
Revenues
CTM	$	4.1	$	3.9	$	0.2			4.5	%	$	12.9	$	14.2	$	(1.3	)		(9.5	) %
IDW		2.7		2.9		(0.2	)		(5.0	)		8.5		8.3		0.2			3.5
Total revenues	$	6.8	$	6.8	$	(0.0	)		0.4	%	$	21.4	$	22.5	$	(1.1	)		(4.7	) %

Exhibit Number	Description





31.1*	Certification of Chief Executive Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to ~~§302~~§ 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification of Chief Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to ~~§302~~§ 302 of the Sarbanes-Oxley Act of 2002.

32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to ~~§906~~§ 906 of the Sarbanes-Oxley Act of 2002.

32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to ~~§906~~§ 906 of the Sarbanes-Oxley Act of 2002.


	CTM Media Holdings, Inc.

~~June 14,~~December 15, 2010	By:	/s/ Marc E. Knoller
		Marc E. Knoller
	Chief Executive Officer and President

December 15, 2010
~~June 14, 2010~~	By:	/s/ Leslie B. Rozner
		~~Leslie B. Rozner~~
		~~Chief Financial Officer, Treasurer and Secretary~~
			Leslie B. Rozner Chief Financial Officer, Treasurer and Secretary

Basic and dilutive loss per share attributable to CTM Media Holdings, Inc. common stockholders:
Loss from continuing operations	$	(0.13	)	$	(0.07	)	$	(0.11	)	$	(4.75	)
Loss from discontinued operations	$	(0.05	)	$	(0.20	)	$	(0.09	)	$	(0.26	)
Net Loss	$	(0.18	)	$	(0.27	)	$	(0.20	)	$	(5.01	)

Weighted-average number of shares used in calculation of basic and dilutive loss per share:		5,834			6,684			6,304			6,684

Dividend declared per common share:	$	0.25			-		$	0.25			-

	April 30,2010		July 31, 2009
	(in thousands)
Assets
Property, plant and equipment, net		1,718		1,851
Licenses and other intangibles, net		499		499
Other assets		7		7

Assets of discontinued operations	$	2,224	$	2,357

	Nine Months Ended April 30, 2010
	Attributable to the company			Noncontrolling Interests			Total
	(in thousands)
Balance, July 31, 2009	$	(14,218	)	$	1,967		$	(12,251	)

Cash contribution and capitalization of balance due to IDT Corporation		27,293			—			27,293
Stock based compensation		245			—			245
Repurchases of common stock and Class B common stock		(1,070	)		—			(1,070	)
Partial acquisition of noncontrolling interest in IDW		431			(845	)		(414	)
Cash dividend paid		(2,082	)		—			(2,082	)
Cash distributions		—			(435	)		(435	)
Comprehensive loss:
Other Comprehensive loss – foreign currency translation adjustments		(11	)		—			(11	)
Net (loss) income		(1,260	)		115			(1,145	)
Comprehensive (loss) income ((		(1,271	)		115			(1,156	)

Balance, April 30, 2010	$	9,328		$	802		$	10,130

	Three Months Ended October 31,2010
	Attributable to Holdings			Non-controlling Interests			Total
	(in thousands)
Balance, July 31, 2010	$	11,453		$	220		$	11,673

Stock based compensation		112			—			112
Cash distributions		—			(12	)		(12	)
Cash dividends		(999	)		—			(999	)
Comprehensive income:
Net income		710			87			797
Other comprehensive income		32			—			32

Comprehensive income		742			87			829

Balance, October 31, 2010	$	11,308		$	295		$	11,603

(in thousands)	CTM			IDW			Total
Three months ended April 30, 2010
Revenues	$	4,051		$	2,781		$	6,832
Operating loss		(343	)		(314	)		(657	)
Depreciation and amortization		186			11			197
Total assets at April 30, 2010 (i)		7,269			6,584			16,189
Three months ended April 30, 2009
Revenues	$	3,877		$	2,928		$	6,805
Operating income(loss)		(906	)		311			(595	)
Depreciation and amortization		181			32			213
Impairment and severance charges		72			-			72
Total assets at April 30, 2009 (i)		7,187			5,705			15,778
Nine months ended April 30, 2010
Revenues	$	12,890		$	8,541		$	21,431
Operating income (loss)		44			(312	)		(268	)
Depreciation and amortization		586			67			653
Nine months ended April 30, 2009
Revenues	$	14,244		$	8,253		$	22,497
Operating loss		(31,098	)		(1,307	)		(32,405	)
Depreciation and amortization		589			183			772
Impairment and severance charges		30,300			1,824			32,124

(in thousands)	CTM		IDW		Total
Three months ended October 31, 2010
Revenues	$	5,029	$	3,620	$	8,649
Operating income		495		362		857
Depreciation and amortization		159		12		171
Total assets at October 31, 2010	$	17,522	$	937	$	18,459
Three months ended October 31, 2009 (i)
Revenues	$	4,915	$	3,318	$	8,233
Operating income		763		308		1,071
Depreciation and amortization		197		31		228
Total assets at October 31, 2009	$	11,556	$	6,537	$	18,093

(in millions)					Change
Quarter ended October 31,	2010		2009		$		%
Revenues
CTM	$	5.0	$	4.9	$	0.1	2.0
IDW		3.6		3.3		0.3	9.0
Total revenues	$	8.6	$	8.2	$	0.4	4.8

(in millions)					Change
Three months ended October 31,	2010		2009		$		%
Costs and expenses
Direct cost of revenues	$	3.8	$	3.7	$	0.1	2.7
Selling, general and administrative		3.8		3.2		0.6	18.8
Depreciation and amortization		0.2		0.2		—	—
Bad debt expense		0.0		0.0		—	—
Total costs and expenses	$	7.8	$	7.1	$	0.7	9.8

(in millions)	Nine months ended April 30,						Three months ended October 31,
	2010			2009			2010			2009
Cash flows provided by (used in):
Operating activities	$	1.8		$	(0.5	)	$	0.1		$	2.1
Investing activities		(0.7	)		(1.5	)		(0.1	)		(0.1	)
Financing activities		(1.4	)		0.6			(0.1	)		1.6
Increase (decrease) in cash and cash equivalents from continuing operations		(0.3	)		(1.4	)
Discontinued operations		(0.4	)		(0.2	)
Increase (decrease) in cash and cash equivalents	$	(0.7	)	$	(1.6	)
(Decrease) increase in cash and cash equivalents							$	(0.1	)	$	3.6