UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED April 30, ~~2021~~2022

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

IDW 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)

520 Broad Street, Newark, New Jersey		07102
(Address of principal executive offices)		(Zip Code)

973-438-3385

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b)-2 of the Exchange Act:

Title of each Class		Trading Symbol		Name of exchange of which registered
~~None~~Class B common stock, $0.01 par value; authorized shares		~~None~~IDW		~~None~~NYSE American

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of June 14, ~~2021~~2022 the registrant had the following shares outstanding:

Class B common stock, $0.01 par value:	~~9,505,080~~13,534,148 shares (excluding 519,360 treasury shares)
Class C common stock, $0.01 par value:	545,360 shares

IDW MEDIA HOLDINGS, INC.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION			1

	Item 1.	Financial Statements (Unaudited)

		CONDENSED CONSOLIDATED BALANCE SHEETS	1

		~~CONDENSED CONSOLIDATED BALANCE SHEETS~~	1

		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	2

		CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~(LOSS)~~ INCOME (LOSS)	3

		CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	4

		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	56

		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	67

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

	Item 3.3	Quantitative and Qualitative Disclosures About Market Risks	31

	Item 4	Controls and Procedures	31

PART II. OTHER INFORMATION

	Item 1.	Legal Proceedings	32

	Item 4.1A.	~~Controls and Procedures~~Risk Factors	32

~~PART II. OTHER INFORMATION~~	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

	Item 1.3.	~~Legal Proceedings~~Defaults upon Senior Securities	32

	Item 4.	Mine Safety Disclosures	32

	Item 5.	Other Information	32

	Item 6.	Exhibits	33

			~~Item 1A.~~SIGNATURES	~~Risk Factors~~	33

	~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	33

	~~Item 3.~~	~~Defaults upon Senior Securities~~	33

	~~Item 4.~~	~~Mine Safety Disclosures~~	33

	~~Item 5.~~	~~Other Information~~	33

	~~Item 6.~~	~~Exhibits~~	34

~~SIGNATURES~~			35

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

IDW MEDIA HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data) April 30,
2021
(unaudited)
October 31,
2020
(Note 1)

Assets
Current assets:
Cash and cash equivalents $ 7,607 $ 10,541
Trade accounts receivable, net 22,063 22,921
Inventory 3,667 3,754
Prepaid expenses 2,178 1,361
Current assets held for sale from discontinued operations - 11,171
Total current assets 35,515 49,748
Property and equipment, net 364 410
Right-of-use assets, net 539 771
Non-current assets
Investments - 25
Intangible assets, net 30 52
Goodwill 199 199
Television costs, net 1,270 2,926
Other assets 325 527
Total assets $ 38,242 $ 54,658
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable $ 1,163 $ 1,406
Accrued expenses 5,424 3,953
Deferred revenue 2,125 2,385
Bank loans payable – current portion 11,664 14,204
Government loans- current portion 1,320 793
Operating lease obligations – current portion 603 562
Other current liabilities 80 69
Current liabilities held for sale from discontinued operations - 8,540
Total current liabilities 22,379 31,912
Non-current liabilities
Operating lease obligations – long term portion 59 368
Government loans – long term portion 1,071 403
Related party loans payable – long term portion - 3,750
Total non-current liabilities 1,130 4,521
Total liabilities $ 23,509 $ 36,433
Stockholders’ equity (see note 3):
Preferred stock, $.01 par value; authorized shares – 500; no shares issued at April 30, 2021 and October 31, 2020 - -
Class B common stock, $0.01 par value; authorized shares – 12,000; 10,024 and 9,987 shares issued and 9,505 and 9,467 shares outstanding at April 30, 2021 and October 31, 2020, respectively 94 93
Class C common stock, $0.01 par value; authorized shares – 2,500; 545 shares issued and outstanding at April 30, 2021 and October 31, 2020 5 5
Additional paid-in capital 94,267 111,379
Accumulated other comprehensive loss - (60 )
Accumulated deficit (78,437 ) (91,996 )
Treasury stock, at cost, consisting of 519 shares of Class B common stock at April 30, 2021 and October 31, 2020 (1,196 ) (1,196 )
Total stockholders’ equity 14,733 18,225
Total liabilities and stockholders’ equity $ 38,242 $ 54,658

(in thousands, except per share data)	April 30, 2022 (unaudited)			October 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	13,681		$	17,532
Trade accounts receivable, net		4,758			5,431
Inventory		3,291			3,090
Prepaid expenses		2,226			2,270
Total current assets		23,956			28,323
Non-current assets
Property and equipment, net		447			347
Right-of-use assets, net		58			302
Intangible assets, net		831			679
Goodwill		199			199
Television costs, net		1,538			1,487
Other assets		84			61
Total assets	$	27,113		$	31,398
Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable	$	1,565		$	1,141
Accrued expenses		3,315			3,786
Production costs payable		72			2,010
Deferred revenue		8			2,045
Operating lease obligations – current portion		47			348
Total current liabilities		5,007			9,330
Non-current liabilities
Operating lease obligations – long term portion		13			20
Total liabilities	$	5,020		$	9,350
Stockholders’ equity (see note 3):
Preferred stock, $.01 par value; authorized shares – 500; no shares issued at April 30, 2022 and October 31, 2021		-			-
Class B common stock, $0.01 par value; authorized shares – 20,000; 14,053 and 12,938 shares issued and 13,534 and 12,419 shares outstanding at April 30, 2022 and October 31, 2021, respectively		134			123
Class C common stock, $0.01 par value; authorized shares – 2,500; 545 shares issued and outstanding at April 30, 2022 and October 31, 2021		5			5
Additional paid-in capital		104,117			103,819
Accumulated deficit		(80,967	)		(80,703	)
Treasury stock, at cost, consisting of 519 shares of Class B common stock at April 30, 2022 and October 31, 2021		(1,196	)		(1,196	)
Total stockholders’ equity		22,093			22,048
Total liabilities and stockholders’ equity	$	27,113		$	31,398

See accompanying notes to condensed consolidated financial statements.

IDW MEDIA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended
April 30, Six Months Ended
April 30,
(in thousands, except per share data) 2021 2020 2021 2020
Revenues $ 10,140 $ 9,268 $ 18,552 $ 19,605

Costs and expenses:
Direct cost of revenues 4,726 3,295 13,959 14,912
Selling, general and administrative 4,910 4,583 9,149 9,019
Depreciation and amortization 60 61 120 128
Bad debt expense 11 - 11 -
Total costs and expenses 9,707 7,939 23,239 24,059
Income (loss) from operations 433 1,329 (4,687 ) (4,454 )

Interest income (expense), net 156 (10 ) 142 (20 )
Other expense, net (12 ) (35 ) (13 ) (61 )
Income (loss) before income taxes 577 1,284 (4,558 ) (4,535 )
Provision for income taxes - - - -
Net income (loss) from continuing operations 577 1,284 (4,558 ) (4,535 )

Loss from discontinued operations, net
(159 ) (1,638 ) (1,280 ) (2,692 )
Gain on sale of discontinued operations 2,123 - 2,123 -
Net income (loss) $ 2,541 $ (354 ) $ (3,715 ) $ (7,227 )

Basic and diluted income (loss) per share (note 2):
Continuing operations $ 0.27 $ 0.15 $ (0.24 ) $ (0.56 )
Discontinued operations (0.02 ) (0.19 ) (0.13 ) (0.33 )
Net income (loss) $ 0.25 $ (0.04 ) $ (0.37 ) $ (0.89 )

Weighted-average number of shares used in the calculation of basic and diluted income (loss) per share: 9,972 8,845 9,962 8,143

	Three Months Ended						Six Months Ended
(in thousands, except per share data)	April 30, 2022			April 30, 2021			April 30, 2022			April 30, 2021

Revenues	$	6,053		$	10,140		$	17,902		$	18,552

Costs and expenses:
Direct cost of revenues		3,597			4,726			8,387			13,959
Selling, general and administrative		4,600			4,921			9,591			9,160
Depreciation and amortization		100			60			184			120
Total costs and expenses		8,297			9,707			18,162			23,239
(Loss) income from operations		(2,244	)		433			(260	)		(4,687	)

Interest income (expense), net		-			156			(10	)		142
Other(expense) income, net		(9	)		(12	)		6			(13	)
Net (loss) income from continuing operations		(2,253	)		577			(264	)		(4,558	)

Loss from discontinued operations, net		-			(159	)		-			(1,280	)
Gain on sale of discontinued operations		-			2,123			-			2,123
Net gain on discontinued operations		-			1,964			-			843
Net (loss) income	$	(2,253	)	$	2,541		$	(264	)	$	(3,715	)

Basic and diluted (loss) income per share (note 2):
Continuing operations	$	(0.17	)	$	0.06		$	(0.02	)	$	(0.45	)
Discontinued operations, net		-			0.20						0.08
Net (loss) income	$	(0.17	)	$	0.25		$	(0.02	)	$	(0.37	)

Weighted-average number of shares used in the calculation of basic and diluted (loss) income per share:		12,906			9,972			12,895			9,962

See accompanying notes to condensed consolidated financial statements.

IDW MEDIA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited)

	Three Months Ended					Six Months Ended
(in thousands)	April 30, 2022			April 30, 2021		April 30, 2022			April 30, 2021
Net (loss) income	$	(2,253	)		2,541	$	(264	)	$	(3,715	)
Foreign currency translation adjustments		-			51		-			39
Sale of discontinued operations		-			21		-			21
Total comprehensive (loss) income	$	(2,253	)		2,613	$	(264	)	$	(3,655	)

See accompanying notes to condensed consolidated financial statements

~~IDW MEDIA HOLDINGS, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(Unaudited)~~

Three Months Ended
April 30, Six Months Ended
April 30,
(in thousands) 2021 2020 2021 2020
Net income (loss) $ 2,541 $ (354 ) $ (3,715 ) $ (7,227 )
Foreign currency translation adjustments 72 4 60 (45 )
Total comprehensive income (loss) $ 2,613 $ (350 ) $ (3,655 ) $ (7,272 )

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

IDW Media Holdings, Inc.

~~IDW MEDIA HOLDINGS, INC.~~

Condensed Consolidated Statements of Stockholders’ Equity

~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

Six Months Ended April 30, ~~2021~~2022 and ~~2020~~2021

(in thousands)

(Unaudited)

Class B
Common Stock Class C
Common Stock Accumulated Non- Treasury Stock,
at Cost
(in thousands) Number of Shares Amount Number of Shares Amount Stock Subscriptions Receivable Additional Paid In Capital Other Comprehensive Loss Retained Deficit Controlling Interest
(“NCI”) Number of Shares Amount Total Shareholders’ Equity
Balance October 31, 2020 9,987 93 545 5 - 111,379 (60 ) (91,996 ) - 519 (1,196 ) 18,225
Stock based compensation 82 82
Issuance of common stock 37 1 24 25
Issuance of stock options 77 77
Comprehensive loss
Sale of discontinued operations (17,295 ) 21 17,274 -
Net Loss (3,715 ) (3,715 )
Other comprehensive income 39 39
Total comprehensive loss 60 (3,715 ) - (3,655 )
Balance April 30, 2021 10,024 94 545 5 - 94,267 - (78,437 ) - 519 (1,196 ) 14,733

Balance October 31, 2019 7,419 74 545 5 (1,000 ) 96,671 (60 ) (78,457 ) 35 519 (1,196 ) 16,072
Stock based compensation 520 520
Issuance of common stock 2,151 15 12,242 12,257
Subscriptions receivable 1,000 11 1,011
Issuance of stock options 333 333
NCI divestment in subsidiary 259 (35 ) 224
Comprehensive loss
Net Loss (7,227 ) (7,227 )
Other comprehensive income (45 ) (45 )
Total comprehensive loss - - - - - - (45 ) (7,227 ) - - - (7,272 )
Balance April 30, 2020 9,570 89 545 5 - 109,777 (105 ) (85,425 ) - 519 (1,196 ) 23,145

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

	Class B Common Stock				Class C Common Stock							Accumulated Other						Treasury Stock, at Cost					Total
(in thousands)	Number of Shares		Amount		Number of Shares		Amount		Additional Paid In Capital			Comprehensive Loss			Accumulated Deficit			Number of Shares		Amount			Stockholders’ Equity
Balance October 31, 2021		12,938	$	123		545	$	5	$	103,819		$	-		$	(80,703	)		519	$	(1,196	)	$	22,048
Stock based compensation										309														309
Issuance of common stock		1,115		11		-		-		(11	)		-			-			-		-			-
Comprehensive loss
Net Income		-		-		-		-		-			-			(264	)		-		-			(264	)
Total comprehensive loss		-		-		-		-		-			-			(264	)		-		-			(264	)
Balance April 30, 2022		14,053	$	134		545	$	5	$	104,117		$	-		$	(80,967	)		519	$	(1,196	)	$	22,093

Balance October 31, 2020		9,987	$	93		545	$	5	$	111,379		$	(60	)	$	(91,996	)		519	$	(1,196	)	$	18,225
Stock based compensation		-		-		-		-		159			-			-			-		-			159
Issuance of common stock		37		1		-		-		24			-			-			-		-			25
Comprehensive loss
Sale of discontinued operations		-		-		-		-		(17,295	)		21			17,274			-		-			-
Net Loss		-		-		-		-		-			-			(3,715	)		-		-			(3,715	)
Other comprehensive income		-		-		-		-		-			39						-		-			39
Total comprehensive loss		-		-		-		-		-			60			(3,715	)		-		-			(3,655	)
Balance April 30, 2021		10,024	$	94		545	$	5	$	94,267		$	-		$	(78,437	)		519	$	(1,196	)	$	14,733

~~IDW MEDIA HOLDINGS, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

Six months ended
April 30,
(in thousands) 2021 2020
Operating activities:
Net loss $ (3,715 ) $ (7,227 )
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization 307 527
Amortization of finance leases 108 165
Bad debt expense (97 ) 482
Stock based compensation 82 520
Stock options 77 333
Amortization of right-of-use asset 513 995
Gain on sale of discontinued operations (2,123 ) -
Loss on deconsolidation of subsidiary - 35
Changes in assets and liabilities:
Trade accounts receivable 847 8,591
Inventory 88 (820 )
Prepaid expenses and other assets (589 ) 115
Television costs 1,656 6,872
Right-of-use assets (269 ) (814 )
Trade accounts payable, accrued expenses and other current liabilities 1,239 (2,702 )
Deferred revenue (260 ) 1,254
Gain on extinguishment of PPP loan (68 ) -
Gain on disposal of ROU assets (97 ) -
Deconsolidation of subsidiary - 339
Net cash (used in) provided by operating activities (2,301 ) 8,665
Investing activities:
Disposition of subsidiary, net of cash received - (115 )
Disposal of discontinued operations (902 ) -
Capital expenditures (72 ) (299 )
Net cash used in investing activities (974 ) (414 )
Financing activities:
Proceeds from issuance of common stock 25 13,268
Repayments of finance lease obligations - (207 )
Proceeds of bank loans - 2,217
Proceeds from government loans 1,196 -
Repayments of related party loans - (4,050 )
Repayments of bank loans (2,540 ) (13,732 )
Net cash used in financing activities (1,319 ) (2,504 )
Effect of exchange rate changes on cash and cash equivalents 39 (45 )
Net (decrease) increase in cash and cash equivalents (4,555 ) 5,702
Cash and cash equivalents at beginning of period 12,162 10,165
Cash and cash equivalents at end of period $ 7,607 $ 15,867

Supplemental schedule of investing and financing activities
Cash paid for interest $ - $ 18
Cash paid for income taxes $ - $ -

See accompanying notes to condensed consolidated financial statements.

IDW Media Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended April 30, 2022 and 2021

(in thousands)

(Unaudited)

	Class B Common Stock				Class C Common Stock							Accumulated Other						Treasury Stock, at Cost					Total
(in thousands)	Number of Shares		Amount		Number of Shares		Amount		Additional Paid In Capital			Comprehensive Loss			Accumulated Deficit			Number of Shares		Amount			Stockholders’ Equity
Balance January 31, 2021		12,950	$	123		545	$	5	$	103,963		$	-		$	(78,714	)		519	$	(1,196	)	$	24,181
Stock based compensation		-		-		-		-		165			-			-			-		-			165
Issuance of common stock		1,103		11		-		-		(11	)		-			-			-		-			-
Comprehensive loss
Net Income		-		-		-		-		-			-			(2,253	)		-		-			(2,253	)
Total comprehensive loss		-		-		-		-		-			-			(2,253	)		-		-			(2,253	)
Balance April 30, 2022		14,053	$	134		545	$	5	$	104,117		$	-		$	(80,967	)		519	$	(1,196	)	$	22,093

Balance January 31, 2021		10,008	$	94		545	$	5	$	111,467		$	(72	)	$	(98,252	)		519	$	(1,196	)	$	12,046
Stock based compensation		-		-		-		-		95			-			-			-		-			95
Issuance of common stock		16		-		-		-		-			-			-			-		-			-
Comprehensive loss
Sale of discontinued operations		-		-		-		-		(17,295	)		21			17,274			-		-			-
Net Income		-		-		-		-		-			-			2,541			-		-			2,541
Other comprehensive income		-		-		-		-		-			51			-			-		-			51
Total comprehensive income		-		-		-		-		-			72			2,541			-		-			2,613
Balance April 30, 2021		10,024	$	94		545	$	5	$	94,267		$	-		$	(78,437	)		519	$	(1,196	)	$	14,733

See accompanying notes to condensed consolidated financial statements.

IDW MEDIA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
(in thousands)	April 30, 2022			April 30, 2021
Operating activities:
Net loss	$	(264	)	$	(3,715	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		184			307
Amortization of finance leases		-			108
Bad debt recovery		-			(97	)
Stock based compensation		309			159
Amortization of right-of-use asset		244			513
Gain on extinguishment of PPP Loans		-			(68	)
Gain on sale of discontinued operations		-			(2,123	)
Changes in operating assets and liabilities:
Trade accounts receivable		673			847
Inventory		(201	)		88
Prepaid expenses and other assets		21			(589	)
Television costs		(51	)		1,656
Operating lease liability		(308	)		(269	)
Trade accounts payable, accrued expenses, production costs payable and other current liabilities		(1,985	)		1,239
Deferred revenue		(2,037	)		(260	)
Gain on disposal of ROU assets		-			(97	)
Net cash used in operating activities		(3,415	)		(2,301	)
Investing activities:
Disposal of discontinued operations		-			(902	)
Capital expenditures		(436	)		(72	)
Net cash used in investing activities		(436	)		(974	)
Financing activities:
Proceeds from issuance of common stock		-			25
Repayments of finance lease obligations		-
Proceeds from government loans		-			1,196
Repayments of bank loans		-			(2,540	)
Net cash used in financing activities		-			(1,319	)
Effect of exchange rate changes on cash and cash equivalents		-			39
Net decrease in cash and cash equivalents		(3,851	)		(4,555	)
Cash and cash equivalents at beginning of period		17,532			12,162
Cash and cash equivalents at end of period	$	13,681		$	7,607

See accompanying notes to condensed consolidated financial statements.

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies

Overview

~~The accompanying unaudited condensed consolidated financial statements of~~

IDW Media Holdings, Inc. ~~(the “Company”~~(“IDWMH”) have been prepared by Company 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. Accordingly, they do not include all 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 six months ended April 30, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending October 31, 2021. The balance sheet at October 31, 2020 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 Registration Statement.

~~Description of Business and Segment Information~~

~~IDW Media Holdings, Inc.~~ together with its subsidiaries (collectively, the “Company”) is a diversified media company with operations in publishing and television ~~entertainment and media distribution.~~

entertainment. The terms “Company,” “we,” “us,” and “our” are used in this report to refer collectively to the parent company and the subsidiaries through which various businesses are conducted.

Basis of Presentation and Principles of Consolidation

The ~~term IDWMH is used to refer~~accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all information and footnotes required by U.S. GAAP for complete financial statements. Certain information and footnote disclosures normally included in our annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted consistent with Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting principally of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results of operations are not necessarily indicative of the results for the full year or for any future period. These financial statements should be read in conjunction with the annual consolidated financial statements and notes thereto also included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. All amounts in these condensed consolidated financial statements and notes to the ~~parent company.~~condensed consolidated financial statements are reflected on a consolidated basis for all periods presented.

The Company’s fiscal year ends on October 31^st. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2021 refers to the fiscal year ended October 31, 2021).

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic, which continues to spread throughout the World. The Company is actively monitoring the COVID-19 pandemic, the restrictive measures imposed to combat its spread and their potential impact on each of our operating segments. While we believe that through the first two quarters of fiscal 2022, there has been significant improvement due to global and domestic vaccination efforts, there is uncertainty around the duration and ongoing impact, if any, of COVID-19 related to both known and unknown risks, including future quarantines, closures and other restrictions resulting from the outbreak, and our operations and our customers and partners may continue to be impacted. The Company has considered information available to it as of the date of issuance of these condensed consolidated financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgements, or an adjustment to the carrying value of its assets or liabilities. The accounting estimates and other matters assessed include, but were not limited to, goodwill and other long-lived assets, and revenue recognition. These estimates may change as new events occur and additional information becomes available. Actual results could differ materially from these estimates.

~~The following are our principal businesses and segments:~~

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Segment Information

~~Publishing~~Financial Accounting Standards Board (“~~IDWP”~~FASB”) Accounting Standards Codification 280 (“ASC 280”), ~~a publishing company~~Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that ~~creates comic books, graphic novels, digital content~~is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and ~~games through its imprints IDW, IDW Games, Top Shelf Productions, Artist’s Editions,~~ in assessing performance.

The ~~Library~~Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results of American Comics, Yoe! Books, Sunday Press, and EuroComics; and Clover Press, a boutique publishing company that focuses on the book trade and direct market. Effective April 1, 2020, our interest in Clover Press decreased to 19.9% and IDWMH no longer consolidates the operations of ~~Clover Press, but rather values~~ the ~~investment at cost;~~segments prepared in accordance with U.S. GAAP when making decisions about allocating resources and assessing performance of the Company (see Note 5).

Our principal business consists of the following segments:

~~IDW Entertainment (“IDWE”), is a production company and studio that develops and produces content and formats for global platforms and services.~~

IDWP Publishing (“IDWP”) creates comic books, graphic novels, digital content and games through its imprints IDW, Top Shelf Productions and Artist’s Editions; and

ii.

IDW Entertainment (“IDWE”) acts as a production company and studio that develops, produces and distributes content based on IDWP’s original IP for a variety of formats including film and television.

Prior to February 15, 2021, we also owned CTM Media Group ~~(“CTM”)~~(CTM), a ~~Company~~company that develops and distributes print and digital-based advertising and information advertising for tourist destinations in targeted tourist markets in 32 states / provinces in the US and Canada. On ~~July 14, 2020,~~February 15, 2021, we consummated the ~~Company and Howard Jonas, our Chairman of the Board of Directors, executed a share purchase agreement pursuant to which we agreed to sell all of the stock~~sale of CTM to ~~Mr.~~an assignee of Howard Jonas, ~~or his assignee (the “CTM Sale”)~~the Company’s Chairman in exchange for (i) the cancelation of $3.75 million of indebtedness we owed to ~~Mr. Jonas by us,~~our Chairman’s designee, (ii) a contingent payment of up to $3.25 million based upon a recovery of quarterly revenues of CTM to 90% of its fiscal 2019 levels during the 18-month period following the ~~closing of the CTM Sale,~~sale, and (iii) a contingent payment if CTM is sold within 36 months of the sale for more than $4.5 million. As of July 31, 2020, CTM was reported as a discontinued operation and CTM’s operations have since been included in the condensed consolidated financial statements as discontinued operations ~~(See~~(see Note ~~12- Discontinued Operations)~~14).

Trade Accounts Receivable, Net

Trade accounts receivables are recorded at the invoiced amount and are generally unsecured as they are uncollateralized. The ~~sale was consummated~~Company provides an allowance for doubtful accounts to reduce receivables to their estimated net realizable value. Judgement is exercised in establishing allowances and estimates are based on ~~February 15, 2021 (the “CTM Sale Date”).~~the tenants’ payment history and liquidity. Any amounts that were previously recognized as revenue and subsequently determined to be uncollectible are charged to bad debt expense included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations. The Company had an allowance for doubtful accounts of $0 as of April 30, 2022 and October 31, 2021.

Television Costs

We expense television production, participation and residual costs over the applicable product life cycle based upon the ratio of the current period’s revenues to the estimated remaining total revenues (Ultimate Revenues) for each production. If our estimate of Ultimate Revenues decreases, amortization of film and television costs may be accelerated. Conversely, if our estimate of Ultimate Revenues increases, film and television cost amortization may be slowed. For television series, Ultimate Revenues include revenues that are expected to be earned within ten years from delivery of the first episode, or if still in production, five years from delivery of the most recent episode. IDWE capitalized cost of production and amortized it over the applicable product life cycle based upon the ratio of the current period’s revenues to the estimated remaining total Ultimate Revenues for each production. Advertising, marketing, and general and administrative costs are expensed as incurred.

Every quarter, the Company prepares analyses to support its content amortization expense. Critical assumptions used in determining content amortization include: (i) determining the grouping of contents (ii) the application of an ultimate revenue forecast model based on the contracts of televisions, (iii) gathering the schedules of delivered television episodes from the relative customers, (iv) calculating current period amortization, (v) assessing the accuracy of the Company’s forecasts. The Company continually reviews its estimates and contracts and revises its assumptions if necessary. Any material adjustments from the Company’s review of the amortization are applied prospectively in the period of the change for assets.

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

With respect to television series or other television productions intended for broadcast, the most sensitive factors affecting estimates of Ultimate Revenues are program ratings and the strength of the advertising market. Television development costs for projects that have been abandoned or have not been set for production within three years are generally written off in the relevant period.

~~(Unaudited)~~

Television costs are stated at the lower of cost less accumulated amortization or fair value. The Company evaluates impairment by the fair value of television costs at the individual level by considering expected future revenue generation, when an event or change in circumstances indicates a change in the expected revenue of the television costs or that the fair value of a film or film group may be less than unamortized costs.

IDWE regularly enters into agreements for the production of its television shows. The agreements provide for the rights and obligations related to the agreement including timing, delivery and payments. IDWE capitalizes the resulting production costs under the agreements in production cost inventory as payments are made or when the products or services are delivered. Amortization of television costs during the three months ended April 30, 2022 and 2021 were $0 and $1,385,0000, respectively. Amortization of television costs during the six months ended April 30, 2022 and 2021 were $999,000 and $5,341,0000, respectively.

~~Note 1—Basis of Presentation and Summary of Significant Accounting Policies (continued)~~

Variable Interest Entities

The Company, through its subsidiary IDWE has arrangements with seven special-purpose entities (“SPEs”)~~, some~~ Some SPEs were formed for the sole purpose of providing production services ~~in Canada for the production~~ of a television pilot and ~~television~~ series ~~others~~in Canada, and other SPEs were formed for production and writing purposes. The SPEs are independently owned companies that are effectively controlled by IDWE ~~that~~and are parties to the related bank production financing arrangements. The Company has determined that SPEs are variable interest entities (“VIEs”) and that the Company is the primary beneficiary of the SPEs activities and was the obligor on the SPEs’ debt. All financial activity of the SPEs ~~have~~has been included in IDWE’s financial statements, which are part of these ~~condensed~~ consolidated financial statements. IDWE ~~does~~is not ~~need~~obligated to provide any support to the VIE’s and therefore, ~~no foreseen~~ potential losses ~~associated. They~~are not foreseen. The SPEs have finished all of the productions and these shows have been delivered. The outstanding loans ~~will be~~have been paid ~~off by the tax credits in the receivable balances.~~off. The carrying amounts and classification of the VIEs’ assets ~~and liabilities~~ are presented below:

(in thousands) April 30,
2021 October 31,
2020
Cash and cash equivalents $ 714 $ 732
Accounts receivable 16,297 12,420
Bank loans 11,664 14,204
Total $ 28,675 $ 27,356

(in thousands)		April 30, 2022				October 31, 2021
Cash and cash equivalents		$	75			$	78

Revenue Recognition

The Company applies the five-step approach as described in ASC 606, Revenue from Contracts with Customers, which consists of the following: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations in the contract and (v) recognizing revenue when (or as) the entity satisfies a performance obligation.

IDWP generates revenue primarily from the sale and licensing of comic books, graphic novels, digital content, and games through IDWP’s ~~primary revenue~~imprints IDW Publishing, IDW Games, Top Shelf, and Artist’s Editions. Revenue from the direct sale of comic books, graphic novels and games is recognized, net of an allowance for estimated sales returns, at the time of shipment of its graphic novels, ~~and~~ comic books and games by IDWP’s ~~distributor~~distributors to its customers. Licensing revenues are recognized upon execution of the agreement for such rights, and other creative revenues are recognized upon completion of services rendered on a contractual basis.

IDWE generates revenue primarily from the licensing and distribution of content across various platforms and formats to audiences globally including television series and films. IDWE’s revenue is recognized when evidence of a sale or licensing arrangement exists, the product is complete, has been delivered or is available for immediate and unconditional delivery, the license period has begun, the fee is fixed or determinable, and collection is reasonably assured.

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

IDWE enters into production agreements which provide for the rights and obligations related to the agreement including timing, delivery and payments. In certain productions in which IDWE is the distributor and IDWE has the obligation to pay artist, director and writer guilds for residuals for the creative writers of content. In addition, IDWE has the right to receive participation rights recoupment based on viewership of the cumulative production. The Company is unable to make an estimate as the recoupment is based on future viewership and therefore revenue will be recognized at a future date once the amount is known.

IDWE’s production activities included some of those provided by Canadian SPEs, and some of those productions qualify for tax credits in Canada. These credits are recorded as reductions in production cost when the ~~SPE~~SPEs becomes entitled to the Canadian tax credits. The Canada Revenue Agency (“CRA”) has completed the audit on these productions and the related tax refunds are no longer estimates. There are possible additional tax credits the Company may be eligible to receive, however due to the uncertainty of the receipt, the Company has not accrued for such credits.

The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the satisfaction of performance obligations, the Company records a contract liability on the balance sheets within deferred revenue until the performance obligations are satisfied.

In the ordinary course of business, the Company’s reportable segments enter into transactions with one another. The most common types of intersegment transactions include IDWE obtaining rights to produce television series based on content created by IDWP. All intersegment transactions are recorded into intercompany receivables or payables and therefore no revenue or inventory eliminations are required.

Revenue Recognition When Right of Return Exists

IDWP offers its book market distributors, a right of return with no expiration date in accordance with general industry practices. These distributors then offer this same right of return to their book market retail customers. Sales returns allowances represent a reserve for IDWP products that may be returned due to dating, competition or other marketing matters, or certain destruction in the field. Sales returns are generally estimated and recorded based on historical sales and returns experience and current trends that are expected to continue. ~~Licensing revenues are recognized upon execution~~As of ~~the agreement for such rights, and other creative revenues are recognized upon completion of services rendered on a contractual basis.~~

~~Use of Estimates~~

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

~~IDW MEDIA HOLDINGS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Note 1—Basis of Presentation and Summary of Significant Accounting Policies (continued)~~

~~Concentration Risks~~

~~IDWP has two significant customers Diamond Comic Distributors, Inc. (“Diamond”) and Penguin Random House (“PRH”), that pose a concentration risk.~~

~~Revenues from Diamond, IDWP’s direct market distributor, represented 25.7% and 13.9% of the total consolidated revenues for the three months ended~~ April 30, 2021 and 2020, respectively, and 26.5% and 16.8% of the total consolidated revenues for the six months ended April 30, 2021 and 2020, respectively. The receivable balances from this customer represented approximately 4.2% and 4.7% of consolidated trade accounts receivable at April 30, 20212022 and October 31, ~~2020,~~2021, the Company’s estimated returns were $116,000 and $127,000, respectively.

Direct Cost of Revenues

~~Revenues from PRH amounted to 23.2%~~

Direct cost of revenues excludes depreciation and ~~26.3%~~non-production cost amortization expense. Direct cost of ~~consolidated revenue in the three months ended April 30, 2021~~revenues for IDWP consists primarily of printing expenses and ~~2020, respectively,~~costs of artist and ~~25.5% and 26.7%~~writers. Direct cost of revenues for IDWE consists primarily of the ~~total consolidated revenues for~~amortization of production costs that were capitalized during the ~~six months ended April 30, 2021 and 2020, respectively. The receivable balances represented 5.7% and 10.5% of consolidated receivables at April 30, 2021 and October 31, 2020, respectively.~~

~~IDWE has two significant customers Netflix and NBC Universal/SyFy that pose a concentration risk.~~

~~Revenue from Netflix, a leading streaming video subscription service, represented 0% and 43.2% of consolidated revenue in the three months ended April 30, 2021 and 2020, respectively, and 0% and 41%~~production of the ~~total consolidated revenues for the six months ended April 30, 2021~~television episodes, accrued third party participation, and ~~2020, respectively. The receivable balances from this customer represented 0% and 15.3% of consolidated trade receivables at April 30, 2021 and October 31, 2020, respectively.~~distribution fees directly related to revenue.

NBC Universal/SyFy, a major television network, which accounted for 4.9% and 0% of consolidated revenue in the three months ended April 30, 2021 and 2020, respectively, and 16% and 0% of the total consolidated revenues for the six months ended April 30, 2021 and 2020, respectively. The receivable balances from this customer represented 0% of consolidated trade receivables at both April 30, 2021 and October 31, 2020.

Deferred Revenue

The Company records deferred revenue upon invoicing for contracted commitments for products and services. Revenue is recognized on the date such product or service is provided or delivered in accordance with the contract.

Concentration Risks

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, and trade accounts receivable. The Company holds cash and cash equivalents at major financial institutions, which often exceed the Federal Deposit Insurance Corporation’s (“FDIC”) insurance limits. Historically, the Company has not experienced any losses due to such concentration of credit risk.

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

IDWP has two significant customers Penguin Random House Publisher Services (“PRHPS”) and Diamond Comic Distributors, Inc. (“Diamond”), that pose a concentration risk.

Revenues from PRHPS, IDWP’s non-direct market distributor, represented 40.5% and 23.1% of the total condensed consolidated revenue for the three months ended April 30, 2022 and 2021, respectively, and 28.0% and 25.4% of the total condensed consolidated revenues for the six months ended April 30, 2022 and 2021, respectively. The receivable balances from PRHPS represented 45.4% and 52.0% of the total condensed consolidated receivables at April 30, 2022 and October 31, 2021, respectively. On June 1, 2022, PRHPS replaced Diamond as IDWP’s distributor to the direct market.

Revenues from Diamond, IDWP’s direct market distributor, represented 38.5% and 25.7% of the total condensed consolidated revenue for the three months ended April 30, 2022, and 2021, respectively, and 23.0% and 26.5% of the total condensed consolidated revenues for the six months ended April 30, 2022 and 2021, respectively. The receivable balances from Diamond represented 28.5% and 20.0% of the total condensed consolidated receivables at April 30, 2022 and October 31, 2021, respectively.

IDWE has two significant customers, Netflix and NBC Universal/SyFy, that pose a concentration risk.

Revenues from Netflix, a leading streaming video subscription service, represented 0.0% and 0.0% of condensed consolidated revenue for the three months ended April 30, 2022 and 2021, respectively, and 23.5% and 0.0% of the total condensed consolidated revenues for the six months ended April 30, 2022 and 2021, respectively.

Revenues from NBC Universal/SyFy, a major television network, represented 0.0% and 4.9% of condensed consolidated revenue for the three months ended April 30, 2022 and 2021, respectively, and 0.0% and 16.0% of the total condensed consolidated revenues for the six months ended April 30, 2022 and 2021, respectively.

Discontinued Operations

CTM ~~has~~ met the criteria for discontinued operations and has been presented as such in the condensed consolidated financial statements. In accordance with ASU 2014-08, “Reporting of Discontinued Operations and Disclosures of Disposals of Components of an Entity,” a disposal is categorized as a discontinued operation if the disposal group is a component of an entity or group of components that meets the held for sale criteria, is disposed of by sale, or is disposed of other than by sale, and represents a strategic shift that has or will have a major effect on an entity’s operations and financial ~~results.~~results.

During the period in which the discontinued operation was classified as held for sale, the net loss was reclassified as a separate line item in the ~~Statement of Operations. Additionally, the gain from the sale was presented as a separate line item on the~~Condensed Consolidated Statement of Operations. Assets and liabilities are also separately reclassified in the balance sheet for all periods presented, prior to the sale. CTM’s assets, liabilities, and cash flows are no longer reflected on the condensed consolidated financial statements for the periods following the CTM Sale Date. Cash flows from a discontinued operation and the continuing business are presented together without separate identification within cash flows from operating, investing and financing activities. ~~Cash flows of~~ CTM’s depreciation, amortization, capital expenditures and significant noncash operating and investing activities for the discontinued operation are presented separately.

Reclassification of prior year presentation

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications have not resulted in impacts to net loss. Stock options have been included with stock-based compensation on the Condensed Consolidated Statements of Stockholders’ Equity and Condensed Consolidated Statement of Cash Flows.

Revision of previously issued consolidated financial statements (in thousands)

During the quarter ended April 30, 2022, the Company identified errors that caused an understatement of previously reported current liabilities and accumulated deficit. Specifically, the error related to the lack of accrual for certain actor residuals related to Wynonna Earp incurred in 2016 and 2017. The correction of these errors increased accrued expenses and accumulated deficit each by $589 as of October 31, 2021. This error had no impact on net income or net cash provided by operating activities for the year ended October 31, 2021.

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~(Unaudited)~~In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the errors and determined that the impact was not material to any of our previously issued financial statements.

~~Note 1—Basis~~

The following table presents a summary of ~~Presentation and Summary~~the impact by financial statement line item of ~~Significant Accounting Policies (continued)~~the corrections as of October 31, 2021:

	As of October 31, 2021 ( in thousands)
Consolidated Balance Sheet	As Previously Reported			Adjustment			As Revised

Accrued expenses	$	3,197		$	589		$	3,786
Total current liabilities	$	8,741		$	589		$	9,330
Total liabilities	$	8,761		$	589		$	9,350

Accumulated deficit	$	(80,114	)	$	(589	)	$	(80,703	)
Total stockholders’ equity	$	22,637		$	(589	)	$	22,048

Recently Issued Accounting Pronouncements Adopted ~~Subsequent to 2020 Fiscal Year End~~

In March 2019, the FASB issued ~~ASU~~Accounting Standard Update (“ASU”) No. 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials. ASU 2019-02 aligns the accounting for production costs of episodic television series with the accounting for production costs of films. It also requires an entity to test a film or license agreement within the scope of Subtopic 920-350 for impairment at the film group level, when the film or license agreement is predominantly monetized with other films and/or license agreements. The Company adopted this ASU on November 1, 2020 and ~~is applying~~applied its provisions prospectively. In connection with this adoption the Company has evaluated this guidance and determined that ~~there are $2,064,509 worth of~~were impairments (see Note 11) from substantively abandoned television costs which materially impacted the ~~Condensed Consolidated Balance Sheets~~consolidated financial statements for the year ended October 31, 2021. These costs were recorded in direct cost of revenues.

In December 2019, the FASB issued ASC Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The purpose of Update No. 2019-12 is to continue the FASB’s Simplification Initiative to reduce complexity in accounting standards. The amendments in Update No. 2019-12 simplify the accounting for income taxes by removing certain exceptions related to the incremental approach for intra-period tax allocation, the requirement to recognize or derecognize deferred tax liabilities related to equity method investments that are also foreign subsidiaries, and ~~Condensed Consolidated Statements of Operations.~~the methodology for calculating income taxes in an interim period. The Company adopted the ASU on November 1, 2021, and adoption did not materially affect our condensed consolidated financial statements.

Recently Issued Accounting Standard Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), ~~Measurement of Credit Losses on Financial Instruments,~~ that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new guidance becomes effective for fiscal years beginning after December 15, 2022, though early adoption is permitted. The new provisions will be applied as a cumulative-effect adjustment to retained earnings. WeThe Company will adopt the new standard on November 1, 2023. ~~We are~~The Company is evaluating the impact that the new standard will have on our condensed consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the measurement of goodwill by eliminating the Step 2 impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The new guidance requires an entity to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new guidance becomes effective for goodwill impairment tests in fiscal years beginning after December 15, 2022, though early adoption is permitted. The ~~company~~Company will adopt this guideline prospectively for the fiscal year beginning November 1, 2023. The Company does not believe that the adoption of this new accounting guidance will have ~~any~~a material impact on its condensed consolidated financial statements.

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2—Earnings Per Share

Basic (loss) earnings per share is computed by dividing net (loss) income 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~~(loss earnings) per share is computed in the same manner as basic ~~earnings~~(loss) income per share except that the number of shares is increased to include ~~restricted stock still subject to risk~~additional shares that would have been outstanding had the potentially dilutive shares been issued, and reduced by the number of ~~forfeiture (non-vested)~~shares the Company could have repurchased with the proceeds from issuance of potentially dilutive shares using the treasury stock method, unless the effect of such increase would be anti-dilutive. The Company excluded 1,166,803 and 46,999, shares of unvested restricted Class B common stock, options to purchase 972,626 and 302,737 shares of Class B common stock, and ~~302,737~~warrants to purchase 187,579 and 187,579 shares of Class B common stock ~~options~~ from the calculation of diluted ~~earnings~~loss per share for the three and six months ended April 30, 2022 and 2021, respectively, as the effect would have been anti-dilutive.

~~IDW MEDIA HOLDINGS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Note 3—Equity~~

~~Non-cash compensation included in selling, general~~ Therefore, basic and ~~administrative expenses was $95,422 and $207,251 in~~diluted (loss) earnings per share are the ~~three months ended April 30, 2021 and 2020, respectively. Non-cash compensation included in selling, general and administrative expenses was $160,009 and $853,127 in~~same for the six months ended April 30, 2022 and 2021.

Note 3—Equity

On July 14, 2021, the number of authorized shares of the Company’s Class B common stock was increased from 12,000,000 to 20,000,000.

Voting Privileges and ~~2020, respectively.~~Protective Features

~~Detailed below are~~Each holder of outstanding shares of Class B ~~Common Stock~~common stock is entitled to ~~Howard S. Jonas,~~cast the ~~Company’s Chairman~~number of votes equal to one tenth of the whole shares of Class B common stock held by such holder. Each holder of outstanding shares of Class C common stock is entitled to cast the number of votes equal to three times the whole shares of Class C common stock held by such holder. Each series of preferred stock, if any are designated and issued, will have such number of shares, designations, preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by our Board of Directors, which may include, among others, dividends, voting rights, and ~~former Chief Executive Officer,~~liquidation preferences.

Restricted Stock

The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service.

A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below:

	Number of Non-vested Shares			Weighted Average Grant Date Fair Value
Outstanding at October 31, 2021		85,999		$	4.68
Granted		1,116,568			1.81
Vested		(34,264	)		4.28
Cancelled / Forfeited		(1,500	)		4.88
Non-vested restricted shares at April 30, 2022		1,166,803		$	1.95

On April 5, 2022, 1,104,972 restricted shares of the Company’s Class B common stock were issued to our Chairman, and have a vesting period of 5 years.

On April 30, 2022, there was $2,092,000 of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over the next 5 years.

On December 31, 2020, 6,710 shares of Class B common stock were issued to our Chairman, for payment of interest on ~~loans:~~

~~Date~~	~~Number~~ ~~of Shares~~
~~December 31, 2020~~		~~6,710~~
~~September 30, 2020~~		~~9,710~~
~~June 30, 2020~~		~~10,335~~
~~March 31, 2020~~		~~14,816~~
~~January 9, 2020~~		~~36,586~~
~~Total shares~~		~~78,157~~

~~On July 13, 2020,~~ the Company issued 314,070 shares of Class B Common Stock to Howard S. Jonas, the Company’s Chairman of the Board of Directors and former Chief Executive Officer, pursuant to a Loan Modification Agreement in which Mr. Jonas and the Company agreed to convert $1.25 million of indebtedness owed by the Company to Mr. Jonas to such 314,070 shares.

On July 16, 2020, the Company settled its intercompany payable to CTM totaling $6,982,305 and subsequently received a distribution of $6,800,000 from CTM. This transaction was booked into additional paid in capital with CTM and IDWMH to have a nil impact and did not trigger any tax impacts.

On March 9, 2020, the Company closed a private placement of shares of Class B Common Stock at $6.00 per share, pursuant to which the Company issued 2,051,002 shares of Class B Common Stock for gross proceeds of approximately $12,300,000 inclusive of $4.0 million debt-to-equity conversion by the Company’s Chairman of the Board of Directors and former Chief Executive Officer, Howard S. Jonas. The shares issued were subject to a contractual restriction on transfer for six months following the closing of the placement and are subject to other restrictions under applicable law. The proceeds from the issuance of Class B Common Stock have been netted with $415,000 of costsloan agreement related to the ~~private placement.~~related party loan that was paid off as of as part of the sale of CTM on February 15, 2021 (see Note 14).

Warrants

~~On April 24, 2019,~~

Detailed below are outstanding warrants issued to our Chairman associated with the two loans made by the Chairman to the Company, ~~closed the initial round~~which have subsequently been repaid. The exercise price and expiration of ~~a private placement of~~these warrants were amended on March 29, 2022. The 98,336 shares of Class B Common Stock to certain existing stockholders at $18.00 per share. In connection with this initial round, on April 24, 2019, the Company issued 767,630 shares of Class B Common Stock for gross proceeds of $13,817,337.

On May 7, 2019, the Company closed the follow-on round of the placement and issued 345,792 shares of Class B Common Stock for gross proceeds of $5,186,885. The follow-on round involved participants in the initial round of the placement who elected to participate in the purchase of unsubscribed shares of Class B Common Stock at $15.00 per share. In the offering, the Company issued a total of 1,113,422 shares of Class B Common Stock and received total gross proceeds of $19,004,229. The shares issued in the offering were subject to a contractual restriction on transfer for six months following the closing of the offering as well as other restrictions under applicable law.

~~In connection with a private placement offering, on June 15, 2019, the Company issued 269,478 shares of Class B Common Stock at a~~had an original exercise price of ~~$17.07 per share for aggregate proceeds~~$26.44 and were set to expire on March 30, 2022. The 89,243 shares had an original exercise price of ~~approximately $4,600,000.~~$42.02. No additional compensation cost was incurred from the modification.

Number of Shares	Type of Share	Exercise Price		Expiration
98,336	Class B common stock	$	1.94	August 21, 2023
89,243	Class B common stock	$	1.94	August 21, 2023

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~(Unaudited)~~Note 4—Stock Based Compensation

2019 Incentive Plan

~~Note 3—Equity (continued)~~

On March 14, 2019, the Company’s Board of Directors adopted the 2019 IDW Stock Option and Incentive Plan (“2019 Incentive Plan”) to provide incentives to executive officers, employees, directors and consultants of the Company and/or its ~~subsidiaries. The Company~~subsidiaries and reserved 300,000 shares of Class B ~~Common Stock~~common stock for the grant of awards under the 2019 Incentive Plan, subject to adjustment. Incentives available under the 2019 Incentive Plan may include stock options, stock appreciation rights, limited stock appreciation rights, restricted stock and deferred stock units. On July 13, 2020, the Board of Directors of the Company increased ~~by 150,000, to 450,000,~~ the number of shares of Class B ~~Common Stock~~common stock reserved for the grant of awards under the 2019 Incentive Plan to 450,000, subject to adjustment. On March 11, 2021, the Board of Directors of the Company increased ~~by 250,000, to 700,000,~~ the number of shares of Class B ~~Common Stock~~common stock reserved for the grant of awards under the 2019 Incentive Plan to 700,000, subject to adjustment. On November 8, 2021, the Board of Directors of the Company increased the number of shares of Class B common stock reserved for the grant of awards under the 2019 Incentive Plan to 1,350,000. The increase was approved on April 5, 2022 at the Company’s 2022 Annual Meeting of Stockholders. On January 13, 2022, the Board of Directors of the Company increased the number of shares of Class B common stock reserved for the grant of awards under the 2019 Incentive Plan to 2,550,000. The increase was approved on April 5, 2022 at the Company’s 2022 Annual Meeting of Stockholders. Options are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those options generally vest based on 3 years of continuous service and have 10-year contractual terms. As of April 30, ~~2021, 285,483~~2022, 311,526 shares remained available to be awarded under the 2019 Incentive Plan.

~~Note 4—Loans~~

~~Related party loans~~

~~On August 21, 2018,~~The following table summarizes stock option activity during the Company entered into a loan agreement with the Company’s Chairman of the Board of Directors (who, at the time was also the Company’s Chief Executive Officer and majority stockholder) (the “Chairman”) for $5,000,000. Interest accrued at prime rate plus 1% and the loan was due to mature on August 20, 2022. Payment of principal and interest were payable from 70% of the Free Cash Flow, as defined in the loan agreement, of the Company’s CTM Media Group Inc. subsidiary. All outstanding shares of CTM Media Group Inc. stock were pledged as security under the agreement. On December 1, 2019, the Company amended the agreement providing that up to 60% of the interest due may, at the option of the Company, be paid in shares of Class B common stock (and the remaining amount in cash) with such shares valued based on the average closing prices for the Class B common stock on the ten trading days immediately prior to the applicable interest due date. As atsix months ended April 30, 2021 the cumulative shares issued in connection with the loan interest was 63,255. The interest is was to be paid quarterly on the loan. In conjunction with the loan, the Company issued the lender a warrant to purchase up to 89,243 shares of the Company’s Class B Common Stock at a price per share of $42.02. The warrant expires August 21, 2023. On July 13, 2020 $1,250,000 was converted into 314,070 shares of Class B Common Stock (Note 3- Equity). On February 15, 2021 the Company closed the previously announced CTM Sale and since the cancelation of the indebtedness was the purchase price the Company wrote down the loan of $3,750,000, the outstanding balance as at April 30, 2021 was nil.2022.

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at October 31, 2021		302,737		$	5.69		8.32	$	-
Granted		698,222			2.39		9.62		-
Exercised		-			-		-		-
Cancelled / Forfeited		(28,333	)		6.10		-		-
Outstanding at April 30, 2022		972,626		$	3.31		9.25	$	-
Exercisable at April 30, 2022		164,920		$	6.17		8.40	$	-

~~Bank Loans~~

On November 21, 2018, a Variable Interest Entity (the “VIE”) (see Note 1) controlled by IDWE entered into a loan agreement with a bank that provides for a production financing commitment in the aggregate amount up to CAD 27,700,000. The loan is secured by the VIE’s assets, rights in the related television production’s episodes and distribution agreements for the production and is repayable from the assignment of proceeds of the related license agreements and tax credits, including interest based on the prime rate. IDWE is the guarantor on the loan. The loan matures on May 31, 2021. At April 30, ~~2021, $5,206,000~~2022, unamortized stock compensation for stock options was ~~outstanding under~~$1,055,000, which is expected to be recognized over the ~~commitment.~~next 3 years.

~~On June 21, 2018, a VIE controlled by IDWE entered into a loan agreement with a bank that provides~~Non-cash compensation for ~~a production financing commitment~~stock options issued to employees and restricted stock issued to employees and non-employees (see Note 3) included in selling, general and administrative expenses for continuing operations was $165,000 and $95,000 during the aggregate amount up to CAD 23,521,000. The loan is secured by the VIE’s assets, rights in the related television production’s episodes and distribution agreements for the production and is repayable from the assignment of proceeds of the related license agreements, including interest based on the prime rate. IDWE is the guarantor on the loan. This loan was refinanced on January 4, 2021 with Royal Bank of Canada for a credit facility of CAD 7,868,000 for the purpose of interim financing certain receivables. The loan matures on May 31, 2021.Atthree months ended April 30, ~~2021 $6,458,000 was outstanding under the commitment.~~

~~IDW MEDIA HOLDINGS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Note 4—Loans (continued)~~

~~Government loans~~

On April 2, 2021, IDW Media Holdings, Inc. (the “Company”) received loan proceeds of $1,195,680 (the “PPP Loan”) from Bank of America, N.A. pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, as amended. The PPP Loan, which was in the form of a Note dated April 1, 2021 issued by the Company, matures on April 1, 2026 and bears interest at a rate of 1% per annum, payable monthly commencing on November 2, 2021. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on certain other debt obligations. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The Company intends to use the entire PPP Loan amount for qualifying expenses.

On April 27, 2020, the Company (inclusive of IDWP and IDWE) received loan proceeds of $1,195,679 (the “IDWMH PPP Loan”) from Bank of America, N.A. pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The IDWMH PPP Loan, which was in the form of a Note dated April 15, 2020 issued by the Company, matures on April 15, 2022 and ~~bears interest at a rate of 1% per annum, payable monthly commencing on November 24, 2020. The Note may be prepaid by~~2021, respectively and $309,000 and $159,000 during the ~~Company at any time prior to maturity with no prepayment penalties,~~six months ended April 30, 2022 and under the terms of the loan, payments can be deferred for six months. Funds from the IDWMH PPP Loan may be used primarily for payroll costs and costs used to continue group health care benefits, and, up to a limited extent, on mortgage payments, rent, utilities, interest and other expenses as described in the CARES Act. Under the terms of the PPP, certain amounts of the IDWMH PPP Loans may be forgiven if they are used for those qualifying expenses. The Company used the entire IDWMH PPP Loan amount for those qualifying expenses.

On December 24, 2020, the Company applied for forgiveness on the IDWMH PPP loan. Forgiveness was applied for under SBA form 3508, using the 24-week Alternative Payroll Covered Period. As 100% of the loan was used during this period for payroll and related payroll expenses, the Company anticipates that the IDWMH PPP loan will be forgiven in its entirety.

2021, respectively.

~~IDW MEDIA HOLDINGS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Note 5—Business Segment Information

The Company has the following ~~three~~ reportable business segments: ~~Publishing,~~IDWP, IDWE and CTM (discontinued operations).

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 ~~making officers.~~

maker. The Company evaluates the performance of its business segments based primarily on operating income. 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. There~~

Total Assets (in thousands)

At April 30, 2022 total assets are ~~no other significant asymmetrical allocations to segments.~~IDWP $13,271, IDWE $2,129, and IDWMH $11,713.

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Operating results for the business segments of the Company are as follows:

(in thousands) (unaudited) Publishing(a) IDWE(b) CTM IDW Media Holdings Total
(discontinued operations) (unallocated overhead)
Three months ended April 30, 2021
Revenues $ 5,988 $ 4,152 $ - $ - $ 10,140
(Loss) income from operations (510 ) 1,216 - (273 ) 433
Loss from discontinued operations, net - - (159 ) - (159 )
Net (loss) income (508 ) 1,382 (159 ) 1,826 (c) 2,541
Total assets at April 30, 2021 12,886 21,194 - 4,162 38,242
Three months ended April 30, 2020
Revenues $ 4,681 $ 4,587 $ - $ - $ 9,268
(Loss) income from operations (646 ) 2,161 - (186 ) 1,329
Loss from discontinued operations, net - - (1,638 ) - (1,638 )
Net (loss) income (647 ) 2,161 (1,638 ) (230 ) (354 )
Total assets at April 30, 2020 12,540 36,178 12,463 11,712 72,893

(in thousands)	IDWP			IDWE(a)			CTM			IDWMH			Total
							(discontinued operations)			(unallocated overhead)
Three months ended April 30, 2022
Revenues	$	6,052		$	1		$	-		$	-		$	6,053
Loss from operations		(267	)		(1,676	)		-			(301	)		(2,244	)
Net loss		(267	)		(1,685	)		-			(301	)		(2,253	)
Three months ended April 30, 2021
Revenues	$	5,988		$	4,152		$	-		$	-		$	10,140
(Loss) income from operations		(509	)		1,216			-			(274	)		433
Loss from discontinued operations, net		-			-			(159	)		-			(159	)
Net (loss) income		(509	)		1,382			(159	)		1,827	(b)		2,541

(in thousands) (unaudited) Publishing(a) IDWE(b) CTM IDW Media Holdings Total
(discontinued operations) (unallocated overhead)
Six months ended April 30, 2021
Revenues $ 11,636 $ 6,916 $ - $ - $ 18,552
Loss from operations (883 ) (3,336 ) - (468 ) (4,687 )
Loss from discontinued operations, net - - (1,280 ) - (1,280 )
Net(loss) income (883 ) (3,171 ) (1,280 ) 1,619 (c) (3,715 )
Total assets at April 30, 2021 12,886 21,194 - 4,162 38,242
Six months ended April 30, 2020
Revenues $ 10,981 $ 8,624 $ - $ - $ 19,605
Loss from operations (554 ) (3,390 ) - (510 ) (4,454 )
Loss from discontinued operations, net - - (2,692 ) - (2,692 )
Net loss (555 ) (3,390 ) (2,692 ) (590 ) (7,227 )
Total assets at April 30, 2020 12,540 36,178 12,463 11,712 72,893

(in thousands) (unaudited)	IDWP			IDWE(a)			CTM			IDWMH			Total
							(discontinued operations)			(unallocated overhead)
Six months ended April 30, 2022
Revenues	$	13,583		$	4,319		$	-		$	-		$	17,902
Income (loss) from operations		246			294			-			(800	)		(260	)
Net income (loss)		246			300						(810	)		(264	)
Six months ended April 30, 2021
Revenues	$	11,636		$	6,916		$	-		$	-		$	18,552
Loss from operations		(883	)		(3,336	)		-			(468	)		(4,687	)
Loss from discontinued operations, net		-			-			(1,280	)		-			(1,280	)
Net (loss) income		(883	)		(3,171	)		(1,280	)		1,619	(b)		(3,715	)

(a)	~~IDWP~~IDWE includes ~~Clover Press through March 31, 2020. As of April 1, 2020, Clover Press was valued at the cost method and was no longer consolidated.~~

~~(b)~~

~~Included in IDWE is~~ Thought Bubble LLC and Word Balloon LLC in which consist of only television costs.

~~(c)~~(b)

The parent company, IDW Media Holdings, ~~segment~~ reported net income in the three and six months ended April 30, 2021 due to the sale of CTM.

~~IDW MEDIA HOLDINGS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Note 6—Trade Accounts Receivable and Deferred Revenue

Trade accounts receivable consists of the following:

(in thousands) April 30,
2021 October 31,
2020
Trade accounts receivable $ 22,207 $ 23,246
Less allowance for sales returns (144 ) (296 )
Less allowance for doubtful accounts - (29 )
Trade accounts receivable, net $ 22,063 $ 22,921

(in thousands)	April 30, 2022			October 31, 2021
Trade accounts receivable	$	4,874		$	5,558
Less allowance for sales returns		(116	)		(127	)
Trade accounts receivable, net	$	4,758		$	5,431

~~Allowance for Doubtful Accounts~~

The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. The allowance is determined based on known troubled accounts, historical experience and other currently available evidence.

Changes in deferred revenue consist of the following:

(in thousands)
Beginning balance, October 31, 2020 $ 2,385
Deferral of revenue 170
Recognition of deferred revenue (420 )
Return of previously collected funds (10 )
Ending balance, April 30, 2021 $ 2,125

(in thousands)	Six months ended April 30, 2022
Beginning Balance	$	2,045
Deferral of revenue		108
Recognition of deferred revenue		(2,145	)
Ending Balance	$	8

The Company expects to satisfy its remaining performance obligations and recognize approximately 100% of this revenue over the next 12 ~~months.~~months ending April 30, 2023.

~~Note 7—Television costs and amortization~~

(in thousands) April 30,
2021 October 31,
2020
In-production $ - $ 435
In-development 1,270 2,491
Total $ 1,270 $ 2,926

Three Months Ended Six Months Ended
(in thousands) 2021 2020 2021 2020
Television cost amortization $ 1,385 $ 773 $ 5,341 $ 8,862
Television cost impairments - - 2,065 -
Total $ 1,385 $ 773 $ 7,406 $ 8,862

~~Amortization expense for television costs are expected to be $1,204,000 over the next twelve months.~~

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~(Unaudited)~~Note 7—Inventory

Inventory consists of the following:

(in thousands)	April 30, 2022		October 31, 2021
Work in progress	$	427	$	495
Finished goods		2,864		2,595
Total	$	3,291	$	3,090

Note 8—~~Accrued~~Prepaid Expenses

~~Accrued~~Prepaid expenses consist of the following:

(in thousands) April 30,
2021 October 31,
2020
Royalties $ 956 $ 1,268
Payroll, accrued vacation & payroll taxes 449 511
Bonus 145 333
Production costs and participation 3,504 1,495
Other 370 346
Total $ 5,424 $ 3,953

(in thousands)	April 30, 2022		October 31, 2021
Royalties and deposits	$	1,313	$	1,215
Tradeshows		290		1
Insurance		157		225
Other prepaids		466		829
Total	$	2,226	$	2,270

Note 9—Property and Equipment

Property and equipment consist of the following:

(in thousands) April 30,
2021 October 31,
2020
Equipment $ 469 $ 424
Furniture & Fixtures 107 105
Leasehold improvements 826 826
Computer software 24 20
1,426 1,375
Less accumulated depreciation and amortization (1,062 ) (965 )
Property and equipment, net $ 364 $ 410

(in thousands)	April 30, 2022			October 31, 2021
Equipment	$	535		$	557
Furniture and Fixtures		241			106
Leasehold improvements		833			827
Computer software		24			24
Total		1,633			1,514
Less accumulated depreciation		(1,186	)		(1,167	)
Property and equipment, net	$	447		$	347

Depreciation expense ~~of all property~~totaled $66,000 and ~~equipment was $49,290, and $60,831~~$49,000 for the three months ended April 30, ~~2021~~2022 and ~~2020,~~2021, respectively and ~~$119,746~~$106,000 and ~~$128,915~~$97,000 for the six months ended April 30, 2022 and 2021, ~~and 2020,~~ respectively.

Note 10—Intangible Assets

Intangible assets consist of the following:

		April 30, 2022
(in thousands)	Amortization Period	Gross Carrying Amount		Additions		Impairments		Accumulated Amortization			Net Book Value
Amortized intangible assets:
Licensing contracts	7 years	$	893	$	—	$	—	$	(893	)	$	-
Software	5 years		704		—		—		(70	)		634
			1,597		—		—		(963	)		634
In-process intangible assets:
Software development costs			122		75		—		—			197
			122		75		—		—			197

Total		$	1,719	$	75	$	—	$	(963	)	$	831

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

			October 31, 2021
(in thousands)	Amortization Period		Gross Carrying Amount		Additions		Impairments		Accumulated Amortization			Net Book Value
Amortized intangible assets:
Licensing contracts		7 years	$	893	$	—	$	—	$	(886	)	$	7
				893		—		—		(886	)		7
In-process intangible assets:
Software development costs				—		672		—		—			672
				—		672		—		—			672

Total			$	893	$	672	$	—	$	(886	)	$	679

Amortization expense totaled $35,000 and $11,000 for the three months ended April 30, 2022 and 2021, respectively and $78,000 and $22,000 for the six months ended April 30, 2022 and 2021, respectively.

Note 11—Television costs and amortization

~~(Unaudited)~~

Television costs consist of the following:

(in thousands)	April 30, 2022		October 31, 2021
In-development	$	1,538	$	1,487
Total	$	1,538	$	1,487

	Three Months Ended				Six Months Ended
(in thousands)	April 30, 2022		April 30, 2021		April 30, 2022			April 30, 2021
Television cost amortization	$	-	$	1,385	$	999		$	5,341
Television cost impairments		155		-		155	��		2,065
Total	$	155	$	1,385	$	1,154		$	7,406

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note ~~10—Commitments~~12—Accrued Expenses

Accrued expenses consist of the following:

(in thousands)	April 30, 2022		October 31, 2021
Royalties	$	1,291	$	1,410
Residuals		868		589
Payroll, bonus, accrued vacation and payroll taxes		805		1,304
Other		351		483
Total	$	3,315	$	3,786

Note 13—Commitments

Lease Commitments

The Company has various lease agreements with remaining terms up to 102.5 years, including leases of office space, warehouses, and ~~various~~ equipment. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

The assets and liabilities from operating ~~and finance~~ leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate, which ~~was~~is determined using the Company’s interest rate on its line of credit.

The Company’s weighted-average remaining lease term relating to its operating leases is ~~1.17~~0.76 years, with a weighted-average discount rate of 4.59%. as of April 30, 2022.

The Company recognized lease expense for its operating leases of ~~$124,960~~$126,000 and ~~$249,920~~$125,000 for the three months ended April 30, 2022, and 2021, respectively, and $251,000 and $250,000 for the six months ended April 30, ~~2021, respectively~~2022 and ~~$180,885 and $355,767 for the three and six months ended April 30, 2020,~~2021, respectively. The cash paid under operating leases was ~~$142,516~~$157,000 and ~~$286,926~~$144,000 for the three months ended April 30, 2022 and 2021, respectively and $314,000 and $287,000 for the six months ended April 30, 2022 and 2021, ~~respectively and $168,968 and $367,109 for the three and six months ended~~respectively.

At April 30, ~~2020, respectively.~~

~~At April 30,~~2022, the Company had a right-of-use-asset related to operating leases of $778,000, accumulated amortization related to operating leases of $720,000, both of which are included as a component of right-of-use assets. On October 31, 2021, the Company had a right-of-use-asset related to operating leases of $1,037,434, accumulated amortization related to operating leases of $497,580, both of which are included as a component of right-of-use assets. At October 31, 2020, the Company had a right-of-use-asset related to operating leases of $1,037,434$1,037,000 and accumulated amortization related to operating leases of ~~$266,488.~~$735,000.

~~The following table presents information about the amount and timing of cash flows arising from the Company’s operating leases as~~As of April 30, ~~2021.~~2022, future minimum lease payments required under operating leases are as follows:

Maturity of Lease Liability (in thousands)	Total
Fiscal years ending October 31:
Rest of 2022	$	42
2023		13
2024		7
2025		-
Thereafter		-
Total minimum lease payments		62
Less: imputed interest		(2	)
Present value of future minimum lease payments	$	60

Maturity of Lease Liability (in thousands) Total
Fiscal years ending October 31:
2021 $ 307
2022 354
2023 13
2024 7
Thereafter -
Total undiscounted operating lease payments $ 681
Less: imputed interest (19 )
Present value of operating lease liabilities $ 662

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note ~~11—Deconsolidation of Subsidiary~~

Effective April 1, 2020, the Company’s interest in Clover Press decreased to 19.9% and IDWMH no longer consolidates the operations of Clover Press. Accordingly, the Company derecognized related assets, liabilities and noncontrolling interests of Clover Press.

~~Analysis of assets and liabilities over which the Company lost control~~

(in thousands) March 31,
2020
Current assets
Cash and cash equivalents $ 215
Trade accounts receivable 1
Inventory 62
Other current assets 9
Noncurrent assets
Intangible assets, net 10
Right-of-use assets 226
Other noncurrent assets 64
Current liabilities
Trade accounts payable (38 )
Operating lease obligation- current (64 )
Related party notes payable (50 )
Non-current liabilities
Operating lease obligations -long term (169 )
Net assets deconsolidated $ 266
c. ~~Loss on deconsolidation of subsidiary~~
(in thousands)
Fair value of interest retained $ 25
Consideration received 100
Carrying amount of interest retained:
Net assets deconsolidated (266 )
Noncontrolling interests 106
Loss on deconsolidation of subsidiary $ (35 )
Loss on deconsolidation of subsidiary was included in other expenses. The technique used to measure fair value was calculating the net present value of future EBITDA projected over five years. The transaction was not with a related party. The continuing involvement consists of 19.9% ownership and an officer of IDWMH has one of three seats on the board.
d. ~~Net cash outflow arising from deconsolidation of the subsidiary~~
(in thousands)
The balance of cash and cash equivalents deconsolidated $ (115 )

~~IDW MEDIA HOLDINGS, INC.~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~

~~Note 12—~~14—Discontinued Operations

As a result of the economic downturn related to the outbreak of the COVID-19 virus, and the impact it had on small businesses in the tourist markets, the Company decided to make a strategic shift to dispose of CTM and to focus on its entertainment and publishing businesses.

On February 15, 2021, pursuant to a sales and purchase agreement (“SPA”) dated as of July 14, 2020 ~~the Company and Howard S. Jonas, the Company’s Chairman of the Board of Directors and former Chief Executive Officer, executed a share purchase agreement pursuant to which the Company agreed to sell~~IDWMH sold all of the stock of CTM to ~~Mr. Jonas or his~~an assignee ~~(the “SPA”)~~of the Chairman in exchange for (i) the cancelation of $3.75 million of indebtedness owed by IDWMH to ~~Mr. Jonas by~~ the ~~Company,~~Chairman’s designee, (ii) a contingent payment of up to $3.25 million based upon a recovery of quarterly revenues of CTM to 90% of its fiscal 2019 levels during the 18-month period following the ~~closing of the~~ CTM Sale Date, and (iii) a contingent payment if CTM is sold within 36 months the CTM Sale Date for more than $4.5 million. Prior to executing the ~~share purchase agreement,~~SPA, the Company obtained a third-party’s valuation of CTM and a fairness opinion that stated the consideration being received by the Company in the CTM Sale was fair. In addition to the Company’s Board of Directors approving the CTM Sale, the Audit Committee of the Board of Directors, which is comprised entirely of independent directors, approved the CTM Sale in compliance with the Company’s Statement of Policy with respect to Related Person Transactions. The CTM Sale was also approved by (1) stockholders representing a majority of the combined voting power of the Company’s outstanding capital stock and (2) stockholders representing a majority of the combined voting power of the Company’s outstanding capital stock not held by ~~Mr. Jonas~~the Chairman or immediate family members of ~~Mr. Jonas,~~the Chairman, including, without limitation, trusts or other vehicles for the benefit of any of such immediate family members or entities under the control of such persons. On December 15, 2020, the right, title and interest to the SPA were assigned to The Brochure Distribution Trust, a South Dakota trust. ~~The~~Since the closing of the CTM Sale, the Company ~~does~~has not ~~expect to have~~had any significant continuing involvement with ~~CTM after the sale closes.~~CTM.

As of July 31, 2020, CTM was reported as a discontinued operation and CTM’s operations have since been included in the condensed consolidated financial statements as discontinued operations. On February 15, 2021, the Company closed the ~~previously announced~~ CTM Sale. The ~~Company wrote down the~~ loan of $3,750,000 was forgiven in part of the sale and ~~record~~the Company recorded a gain of $2,123,219 based on CTM’s net asset value as of the CTM Sale Date. CTM’s assets are no longer reflected on the condensed consolidated financial statements for the periods following the CTM Sale Date and CTM’s operations are only consolidated in the Company’s ~~Condensed Consolidated Statements~~condensed consolidated statements of ~~Operations~~operations results until the CTM Sale Date. There was no contingent gain recorded since there was no foreseeable contingent payments to the Company.

~~According~~Pursuant to ASC 205-20-45-9 general corporate overhead should not be allocated to discontinued operations. The Company did not allocate any corporate overhead to CTM when it began being classified as held for sale in the third quarter of 2020 and continued to not allocate any ~~expenses for~~expenses.

The consolidated statements of operations include the ~~six months ending April 30, 2021.~~following results related to CTM discontinued operations:

Results of discontinued operations

(in thousands)	Three months ended, April 30, 2021			Six months ended, April 30, 2021

Revenue	$	207		$	1,427
Direct cost of revenue		105			946
Selling, general and administrative		227			1,649
Depreciation and amortization		45			295
Bad Debt		1			(109	)
Total costs and expenses		378			2,781
Loss from operations		(171	)		(1,354	)
Interest expense, net		19			6
Other income (expense), net		(7	)		68
Loss before income taxes		(159	)		(1,280	)
(Provision for) benefit from income taxes		-			-
Net loss	$	(159	)	$	(1,280	)

IDW MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Note 12—Discontinued Operations (continued)~~

~~Following is a summary of the Company’s results of: discontinued operations for the three and six months ended for April 30, 2021 and April 30, 2020, cash flows of~~ CTM’s depreciation and amortization, capital expenditures and ~~significant noncash operating and investing~~notable activities for the discontinued operation ~~for the six months ended April 30, 2021 and April 30, 2020 and a schedule of assets and liabilities from discontinued operations as of April 30, 2021 and October 31, 2020.~~include:

Results of discontinued operations Three months ended
April 30, Six months ended,
April 30,
(in thousands) 2021 2020 2021 2020
Revenue $ 207 $ 2,287 $ 1,427 $ 6,095
Direct cost of revenue 105 1,236 946 2,927
Selling, general and administrative 227 1,955 1,649 4,803
Depreciation and amortization 45 293 295 564
Bad Debt 1 431 (109 ) 482
Total costs and expenses 378 3,915 2,781 8,776
Loss from operations (171 ) (1,628 ) (1,354 ) (2,681 )
Interest expense, net 19 (9 ) 6 (18 )
Other (expense) income, net (7 ) (1 ) 68 7
Loss before income taxes (159 ) (1,638 ) (1,280 ) (2,692 )
Provision for income taxes - - - -
Net loss $ (159 ) $ (1,638 ) $ (1,280 ) $ (2,692 )

(in thousands)	Six months ended, April 30, 2021

Depreciation and amortization	$	185
Amortization of finance lease		109
Amortization of right-of-use assets		282
Capital expenditure		(22	)
Gain on extinguishment of PPP loan		(68	)

~~(i)~~

~~Stock based compensation for discontinued operations included in selling, general and administrative expenses is $0 in both the three and six months ended April 30, 2021 and 2020, respectively.~~

~~(ii)~~

~~CTM is no longer consolidated into the Company as of February 15, 2021 the CTM Sale Date.~~

~~Cash flows from discontinued operations for the six months ended April, 30~~Note 15—Subsequent events

(in thousands) 2021 2020
Depreciation and amortization $ 185 $ 399
Amortization of finance lease 109 165
Capital expenditure (22 ) (299 )

~~IDW MEDIA HOLDINGS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Note 12—Discontinued Operations (continued)~~

Assets and liabilities of Discontinued Operations
(in thousands) April 30,
2021 October 31,
2020
Assets
Cash $ - $ 1,621
Trade receivables, net - 844
Prepaid expenses - 368
Total current assets* -
Property and equipment, net - 1,274
Right-of-use assets, net - 4,649
Intangibles assets, net - 142
Goodwill - 2,110
Other assets - 163
Total Assets $ - $ 11,171
Liabilities
Trade accounts payable - 891
Accrued expenses - 368
Deferred revenue - 664
Government loan- current portion - 1,125
Operating lease obligations-current portion - 909
Finance lease obligations- current portion - 342
Income taxes payable and other current liabilities - 71
Total current liabilities* -
Government loan- long term portion - 684
Operating lease obligations – long term portion - 3,034
Finance lease obligations – long term portion - 452
Total non-current liabilities* -
Total Liabilities $ - $ 8,540

The assets and liabilities of the disposal group classified as held for sale are all classified as current on Assets and Liabilities of Discontinued Operations since it’s probable the sale will occur and proceeds will be collected within one year. Therefore, no sub totals between current and non-current have been displayed. Since the sale of the discontinued operations the assets and liabilities are no longer reflected above.

~~Note 13—Reclassification of prior year presentation~~

~~Certain prior year amounts have been reclassified for consistency with the current year presentation.~~

~~Note 14—Subsequent events~~

~~Management~~The Company has evaluated subsequent events through June 14, ~~2021,~~2022, the date on which the condensed consolidated financial statements were available to be issued. There were no material subsequent events that require recognition or additional disclosures in these condensed consolidated financial statements, except as follows:

On ~~May~~April 5, 2022, the Company entered into a new lease agreement for IDWP in San Diego, California. The new lease has an initial term of 3.25 years and commenced on June 1, 2022. Base rent for the initial term is approximately $424,000. The Company has an option to extend the term of the lease for an additional 3 ~~2021~~years exercisable only by written notice. The lease is subject to additional charges for common area maintenance and ~~May 10, 2021 both bank loans held by the VIEs controlled by IDWE were subsequently paid off and there are no remaining balances.~~other costs.

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

The following information should be read in conjunction with the accompanying ~~combined~~condensed consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited ~~combined~~consolidated financial statements and the related notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~contained~~included in ~~the Company’s Registration Statement~~our Annual Report on Form ~~S-1 as amended~~10-K for the fiscal year ended October 31, 2021, which was filed with the U.S. Securities and Exchange Commission ~~(or SEC)~~(“SEC”) on ~~May 11, 2021 (“the Registration Statement”~~January 20, 2022 (the “2021 Form 10-K”).

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

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of 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 forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are not limited to, those discussed in the ~~Registration Statement.~~2021 Form 10-K. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. 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.

~~Overview~~OVERVIEW

~~Our~~We were incorporated in the State of Delaware in May 2009.

In 2009, IDT Corporation, our former parent corporation, completed a tax-free spinoff (the “Spin-Off”) of the Company through a pro rata distribution of our common stock IDT’s stockholders.

IDW Media Holdings, Inc., a Delaware corporation, is a holding company consisting of the following principal ~~businesses consist of:~~businesses:

i.●

IDW Publishing, or IDWP, ~~a publishing company that~~ creates comic books, graphic novels, digital content ~~and games~~ through its imprints IDW, ~~IDW Games,~~ Top Shelf Productions and Artist’s Editions, The Library of American Comics, Yoe! Books, Sunday Press, and EuroComics; and Clover Press, a boutique publishing company that focuses on the book trade and direct market. Effective April 1, 2020, our interest in Clover Press decreased to 19.9% and IDWMH no longer consolidates the operations of Clover Press, but rather values the investment at cost;Editions; and

~~ii.~~●

IDW Entertainment, or IDWE, is a production company and studio that develops, produces and ~~produces~~distributes content based on IDWP’s original IP for a variety of formats including film and ~~formats for global platforms and services.~~television.

Prior to February 15, 2021, we also owned CTM Media Group (CTM), a company that develops and distributes print and digital-based advertising and information advertising for tourist destinations in targeted tourist markets in 32 states / provinces in the US and Canada. ~~IDWMH has announced an agreement to sell CTM.~~ On ~~July 14, 2020,~~February 15, 2021, we ~~and Howard Jonas, our Chairman of~~consummated the ~~Board of Directors, executed a share purchase agreement pursuant to which we agreed to sell all of the stock~~sale of CTM to ~~Mr.~~an assignee of Howard Jonas, ~~or his assignee~~the Company’s Chairman in exchange for (i) the cancelation of $3.75 million of indebtedness we owed to ~~Mr. Jonas by us,~~our Chairman’s designee, (ii) a contingent payment of up to $3.25 million based upon a recovery of quarterly revenues of CTM to 90% of its fiscal 2019 levels during the 18-month period following the ~~closing of the CTM Sale,~~sale, and (iii) a contingent payment if CTM is sold within 36 months of the sale for more than $4.5 million. As of July 31, 2020, CTM was reported as a discontinued operation and CTM’s operations have since been included in the financial statements as discontinued operations. ~~The sale was consummated on February 15, 2021.~~

~~Reportable Segments~~COVID-19: Overview of Impacts

~~We have the following three reportable business segments: IDWP, IDWE and CTM (discontinued operations).~~

IDWMH:

Received two PPP loans related to core IDWE and IDWP operations.

~~IDWP~~

$1,195,679 on April 27, 2020, subsequently forgiven on July 20, 2021

$1,195,680 on April 2, 2021, subsequently forgiven on October 27, 2021

●

IDWP: Although COVID-19 caused changes in direct-market returnability in 2020, effective in April 2021, the return policies have reverted back to pre-COVID-19 industry standard practices. Additionally, IDWP renegotiated the terms of one of its lease agreements due to COVID-19 impacts. Per ASC 842 guidance, the lease liabilities were remeasured as of the modification dates as if the leases were new leases commencing at such time. Accordingly, the Right-Of-Use assets were adjusted by amounts equal to the adjustments to the lease liabilities. Although the delay in comic releases continues to have an impact on the industry, the impact has been slowly decreasing and returning to pre-COVID-19 levels.

●

IDWE: Industry-wide production suspensions halted filming and production of Wynonna Earp Season four after the completion of six of twelve episodes. IDWE continues its program to develop, package and pitch from its library on a largely remote basis. While there are some in-person writer’s rooms with strict COVID protocols, the majority of writer’s rooms, pitch scenarios and development conversations are all still happening remotely, with little to no impact on filming and production schedules.

Business Description

IDW Publishing

IDWP is an award-winning publisher of comic books, original graphic novels, and art ~~books as well as board and tabletop games.~~books. Founded in 1999, IDWP has a long tradition of supporting original, powerful creator-driven titles. In 2002, IDWP published 30 Days of Night by Steve Niles and Ben Templesmith followed by other horror titles that kickstarted a resurgence in horror-comic publishing across the industry. Since then, IDWP has significantly diversified its publications. Joe Hill and Gabriel Rodríguez’s Locke & Key, Jonathan Maberry’s V Wars, Stan Sakai’s Usagi Yojimbo, ~~Walter Simonson’s~~ ~~Ragnarök~~, Beau Smith’s Wynonna Earp, ~~Chris Ryall~~Alan Robert’s The Beauty of Horror adult coloring books, and ~~Ash ley Wood’s~~Darwyn Cooke’s graphic novel adaptations of Richard Stark’s ~~Zombies vs Robots~~Parker~~, and Joe Hill and Martin Simmonds’~~ ~~Dying is Easy~~ novels are just a few of the hundreds of outstanding, award-winning titles published since its inception. ~~Titles such as~~ ~~Canto, Ghost Tree, Road of Bones, Mountainhead~~~~, and others in active development now.~~

In 2015, IDWP acquired Top Shelf Productions, an award-winning ~~critically-acclaimed~~critically acclaimed publisher of graphic novels, which continues to operate as a thriving imprint. Top Shelf Productions is renowned for publishing works of literary significance including the #1 New York Times and Washington Post bestselling trilogy, March, by Congressman John Lewis, Andrew Aydin, and Nate Powell. March is the only graphic novel to have won the National Book Award and is the second most taught graphic novel in schools. In July 2019, Top Shelf Productions released George Takei’s graphic memoir, They Called Us Enemy, which debuted at #2 on the New York Times Paperback Nonfiction Best Sellers list and as a #1 bestseller on Amazon. ~~They Called Us Enemy~~ ~~was named a “Best Book~~Both titles are now perennial bestsellers and considered two of the ~~Year” by NPR, Amazon, Forbes,~~finest non-fiction graphic novels ever made. Other iconic Top Shelf Productions titles include Kim Dwinell’s ~~Publishers Weekly, School Library Journal, Kirkus Reviews~~Surfside Girls, ~~the New York Public Library,~~Jeff Lemire’s Essex County and ~~more.~~The Underwater Welder, and Hannah Templer’s Cosmoknights.

In addition to its core of creator-driven franchises, IDWP has also partnered with the owners of major licensed brands to publish many successful licensed titles, ~~including:~~including Hasbro’s Transformers, G.I. Joe, Dungeons & Dragonsand My Little Pony; Sega’s Sonic The Hedgehog; ~~CBS’s~~ Paramount Global’s, Star Trek; ~~Sony’s~~ ~~Ghostbusters~~~~; Viacom’s~~ Teenage Mutant Ninja Turtles~~; the Marvel Action line of middle-grade comic books designed for younger readers;~~ and Toho’s ~~Godzilla~~~~; and Lucasfilm’s~~ ~~Star Wars Adventures~~Godzillas. These licensed titles bring with them diverse built-in audiences and ~~also~~ build cache and retailer support for IDWP. With licensed franchises, ~~IDWP~~IDWP’s strategy is to focus not only on licenses that have eager, built-in fan followings but also ongoing licensor support through other channels, such as toys, animation, and film. This strategy enables IDWP to expand its audience reach and to pursue sub-license opportunities with foreign publishers. IDWP also collaborates with other comic book publishers to co-publish certain titles, including Batman vs. Teenage Mutant Ninja Turtles and Locke & Key/The Sandman Universe: Hell & Gone(with DC Comics) ~~and~~, Rick & Morty vs. Dungeons ~~and~~& Dragons (with Oni Press, Inc.) and Godzilla vs. Power Rangers (with Boom Studios).

IDWP’s focus is to expand and market its library of titles, from both creator-owned titles in our IDW and Top Shelf brands; and also, in partnership with our top-of-class creative partners under our IDW brand. IDWP works synergistically with IDWE to develop new titles and to support existing titles.

IDW Originals is a line of original comic series and graphic novels for the direct comic market and the book trade market. Dedicated to cultivating a diverse lineup of content and creators across all genres and age groups, IDW Originals works with a variety of talent from New York Times Bestselling writers like Scott Snyder on “Dark Spaces: Wildfire,” Stephen Graham Jones on “Earthdivers,” and G. Willow Wilson on “The Hunger and the Dusk.” Plus up-and-coming talent creating the bestsellers of tomorrow. In addition to publishing great content, IDW Originals is also focused on creating IP that can be exploited across all media platforms.

IDWP is also home to the acclaimed imprints The Library of American Comics (publishing classic comic reprints); EuroComics (bringing foreign language comics to an English-speaking audience); Yoe! Books (specializing in creative historical comic collections); Artist’s Editions, ~~(scans~~oversized deluxe hardcovers featuring scans of original art printed at the same size they were drawn with all the distinctive creative nuances that make original art ~~unique);~~unique. Some of the standout Artist’s Editions titles include Jim Lee’s X-Men, Mike Mignola’s Hellboy, David Mazzucchelli’s Daredevil Born Again and ~~Sunday Press (producing restorations~~Jim Sterako’s Nick Fury Agent of ~~classic American comic strips)~~SHIELD.

Many of IDWP’s titles are available ~~in a variety of languages~~ worldwide through foreign ~~licensing.~~licensing with 642 titles available in 62 territories in 24 languages. In ~~2019,~~2020, IDW ~~also announced~~kicked off a major new initiative to release key titles as Spanish-language graphic novels in the North American ~~market. This initiative kicked off in Summer 2020~~market with the release of Spanish-language editions of They Called Us Enemy, Red Panda & Moon Bear, Locke & Keyand Sonic the Hedgehog.

IDWP’s largest segment is the publication of comic book and trade paperback products. Its comics and graphic novels are primarily distributed through three channels: (i) to comic book specialty stores (the “direct market”)~~. Diamond Comic Distributors, Inc. serves as IDWP’s distributor to the direct market, worldwide;~~; (ii) to traditional retail outlets, including bookstores and mass market stores, on a returnable basis (the “non-direct market”). IDWP’s non-direct market distributor is Penguin Random House Publisher Services (PRHPS). IDWP works hand-in-hand with PRHPS to sell-in and promote IDWP titles to buyers at non-direct market customers such as Amazon, Barnes & Noble, Baker & Taylor, Ingram, Follett, Target, Walmart, and more;; and (iii) to Ebook distributors (“digital publishers”). IDWP’s publications are widely available digitally through popular distributors such as Comixology, Amazon, Apple iTunes and iBooks, Google Play, Hoopla, Overdrive, and via IDWP’s own ~~website,~~webstore at idwpublishing.com. Through the direct market and non-direct market, IDWP, including its imprint Top Shelf Productions, sold over ~~4.1~~4.8 million units in fiscal year ~~2020~~2021 and ~~was~~is regularly recognized as the fourth largest publisher in its ~~category in calendar year 2019.~~category. Diamond served as IDWP’s distributor to the direct market, worldwide, and beginning June 1, 2022, PRHPS replaced Diamond as IDWP’s distributor to the direct market. IDWP’s non-direct market distributor is PRHPS. IDWP works together with PRHPS to sell-in and promote IDWP titles to buyers at non-direct market customers such as Amazon, Barnes & Noble, Baker & Taylor, Ingram, Follett, Target, Walmart, and more.

In September 2021, IDWP announced an exclusive worldwide multi-year sales and distribution agreement with PRHPS for IDW’s newly published and backlist comic book periodicals, trade collections, and graphic novels to the Direct Market comic shops beginning June 1, 2022.

In 2014, IDWP launched IDW Games to develop and publish card, board, and tabletop games. Similar to IDWP’s book content, IDW Games ~~offers~~offered a mix of popular licensed titles such as Dragon Ball Z and Batman the Animated Series, as well as creator developed strategic hobby games, such as Towers of Arkhanos and Tonari. IDW Games’ products ~~are~~were sold to distributors worldwide and are available through retailers such as Gamestop, Barnes & Noble, and Amazon, independent games and comics stores, as well as the direct-to-consumer channel through its website and marketing campaigns. In calendar 2021, the Company wound down IDW Games and, going forward, IDW Games is only backfilling final orders and reproducing select existing products.

To further expand and build creator-owned properties beyond publishing, IDWP works with IDWE, as well as other outside partners, to bring creator-owned franchises to television and film through licensing arrangements.

As a result of the COVID-19 pandemic, the direct market ceased distribution of new products from April 1, 2020 through May 19, 2020. Accordingly, IDWP did not publish any new comics during this period. Based upon distributor capacity new comic releases began following a reduced distribution schedule beginning May 20, 2020, with the capacity for new product increasing over the subsequent months. The delay in comic releases continues to have an impact on the publication dates of the related collections in all markets. Additionally, sales made through Diamond, a traditionally non-returnable market, had been made returnable although this has not resulted in a significant increase in returns. Effective in April 2021 the return policies have reverted back to pre- COVID. In order to properly reflect the needs of IDWP during the period of reduced output IDWP paused creative work on many projects, furloughed staff, and experienced a limited number of layoffs. With the receipt of PPP funding and direct market distribution coming back online, furloughed staff have since resumed working and creative work has recommenced.

~~In order to~~To expand its business ~~counter a persistent industry-wide decline in direct market sales~~ and outperform its industry competitors, IDWP continues to focus on launching new creator-owned titles and partnering with established brands to bring fan-favorite properties to the comics market. IDWP is expanding the reach of existing and new products through the development of specialty, library, and education markets; increased direct-to-consumer initiatives; and broadening the reach of creator-driven series through licensing opportunities.

In May 2019, IDWMH invested in a new publishing entity, Clover Press, established by Ted Adams and Robbie Robbins, co-founders of IDWP. Clover Press is a separate entity and operates independently from IDWP. Due to its size, and nature of the business, activity related to Clover Press was included with IDWP for presentation purposes while it was a consolidated entity. Effective April 1, 2020 IDWMH’s interest in Clover Press decreased to 19.9%, as a result it is now an investment valued at cost and no longer consolidated.

IDWP’s revenues represented ~~59%~~100% and ~~63%~~59.1% of our consolidated revenues in the three months ended April 30, 2022 and 2021, respectively and 75.9% and 62.7% in the six months ended April 30, 2022 and 2021, respectively. ~~IDWP’s revenues represented 51% and 56% of our consolidated revenues in the three and six months ended April 30, 2020, respectively.~~

~~IDWE~~

IDW Entertainment

IDWE is a production company and studio that develops, produces and ~~produces~~distributes content based on IDWP’s original IP for a variety of formats including film and ~~formats for global platforms and services.~~television.

IDWE was formed on September 20, 2013 to leverage IDWP properties into television series, features and other forms of media by developing and producing original content. IDWE maintains a robust development slate of properties based on IDWP properties ~~primarily~~ for the adult ~~series~~series/features marketplace as well as the kids, family and animation space. IDWE is in advanced conversations with various global studios, networks and ~~networks~~streamers for their exploitation. IDWE actively recruits and acquires new franchise material for exploitation primarily in the series format.

IDWE has developed and/or produced ~~four~~a number of series for ~~television that premiered in calendar 2019 and 2020:~~television:

●

Wynonna Earp season four aired in two parts due to worldwide COVID-19 related production shutdowns. The first six episodes of season four premiered July 26, 2020 and the second half of season four began airing March 5, 2021. The show was created by Emily Andras and stars Melanie Scrofano and is based on the IDWP comics of Beau Smith. Season four’s twelve episodes are being produced by Seven24 Films and distributed by IDWE, in partnership with Syfy and CTV Sci-Fi. Cineflix Studios is the co-producer and global distributor for the series. Season one’s thirteen episodes aired in fiscal 2016. Season two’s twelve episodes aired in fiscal 2017, and Season three’s twelve episodes aired in fiscal 2018.

●

V Wars debuted on Netflix on December 5, 2019. The 10-episode vampire thriller stars Ian Somerhalder and was produced by High Park Entertainment. The series was based upon Jonathan Maberry’s ~~IDW Publishing~~IDWP comic book series of the same name. The rights to IDWE’s streaming genre series V Wars reverts back to IDW in 2022; as a result we will be exploring opportunities to monetize the past season and potential opportunities to continue the story with a new partner.

●

October Faction premiered on Netflix on January 23, 2020. The 10-episode show was based on the ~~IDW Publishing~~IDWP comics of

Steve Niles and Damien Worm and was adapted by showrunner Damian Kindler and starred Tamara Taylor and J.C.

MacKenzie. It was also produced by High Park Entertainment.

●

Locke & Key premiered on Netflix on February 7, 2020. The show is based on the critically-acclaimed graphic novels of Joe Hill and Gabriel Rodriguez published by IDWP. Season two ~~and three have been ordered by Netflix~~aired in October 2021 topping Netflix’s global TV charts in over 81 countries, and season ~~two began~~three has been renewed by Netflix.

●

IDWE recently wrapped production ~~Fall 2020.~~ on its original Apple TV+ series Surfside Girls, based on the Top Shelf graphic novel of the same name. The live-action 10-episode first season will premiere on Apple TV+ on August 19, 2022.

~~Previously,~~While in the past, IDWE ~~in partnership with Ideate Media, partnered with AMC Studios~~focused solely on television development and financing production opportunities, a broadening of our strategic goals has evolved to ~~license~~focus on low to no-risk investments as well as developing IP for feature film and podcast opportunities. With more varied opportunities for our content/IP, we will be able to grow our brand, expand the ~~U.S. broadcast and streaming video on demand (SVOD) rights to Dirk Gently, a live-action series based on~~perception of IDWE, increase revenue opportunities for the ~~Douglas Adams novels and related comic books published by IDWP, to BBC America. Season one~~publishing side of the ~~series premiered October 22, 2016 in the U.S. on BBC America. The second~~business and ~~final season aired on BBC America in 2017. Netflix currently streams both seasons worldwide.~~develop a more robust entertainment footprint.

IDWE’s revenues represented ~~41%~~0% and ~~37%~~40.9% of our consolidated revenues in the three months ended April 30, 2022 and 2021, respectively and 24.1% and 37.3% in the six months ended April 30, 2022 and 2021,respectively. ~~IDWE’s revenues represented 49% and 44% of our consolidated revenues in the three and six months ended April 30, 2020,respectively.~~

CTM (Discontinued ~~Operations)~~operations)

As a result of the economic downturn related to the COVID-19 pandemic, and the impact it had on CTM, the Company decided to sell CTM and focus on our entertainment and publishing business. OnPursuant to a sales and purchase agreement (“SPA”) dated as of July 14, 2020, we ~~and Howard Jonas, our Chairman of the Board of Directors, executed a share purchase agreement pursuant to which we agreed to sell~~sold all of the stock of CTM to ~~Mr. Jonas or his~~an assignee of the Chairman in exchange for (i) the cancelation of $3.75 million of indebtedness owed ~~to Mr. Jonas~~ by us to the Chairman’s designee, (ii) a contingent payment of up to $3.25 million based upon a recovery of quarterly revenues of CTM to 90% of its fiscal 2019 levels during the 18-month period following the ~~closing of the~~ CTM Sale Date, and (iii) a contingent payment if CTM is sold within 36 months of the CTM Sale Date for more than $4.5 million. The CTM Sale closed on February 15, 2021 and CTM is only consolidated up until the sale date with the gain reflected separately in the ~~Condensed Consolidated Statement~~consolidated statement of ~~Operations.~~operations.

~~COVID-19: Overview of Impacts~~

●

~~IDWMH: Received two PPP loans related to core IDWE and IDWP operations.~~

○

~~$1,195,679 on April 27, 2020~~

○

~~$1,195,680 on April 2, 2021~~

●

~~IDWE: Industry-wide production suspensions halted filming and production of~~ ~~Wynonna Earp~~ Season four after the completion of six of twelve episodes. IDWE continued its program to develop, package and pitch from its library on remote basis. Writer’s rooms have transitioned to virtual operations.

●

IDWP: Direct market distribution was halted in April 1, 2020 by Diamond, the industry’s primary distributor, and IDWP subsequently furloughed approximately 25% of its workforce. Using the proceeds of PPP loans, IDWP was able to bring back 50% of the furloughed workforce. IDWP transitioned to focus on direct-to-consumer (“DTC”) and indirect market channels, and was able to offset the lost direct market sales. Diamond resumed partial operations on May 20, 2020. In recent months, direct market sales volumes have begun to increase, reaching pre-pandemic levels. Additionally, although most products sold through Diamond, a traditionally non-returnable market, have been made returnable, this has not resulted in a significant increase in returns and sales through PRH, a largely returnable market, have seen decreased overall returns. IDWP renegotiated the terms of one of its lease agreements due to COVID-19 impacts. Per ASC 842 guidance the lease liabilities were remeasured as of the modification dates as if the leases were new leases commencing at such time. Accordingly, the ROU assets were adjusted by amounts equal to the adjustments to the lease liabilities.

~~Presentation~~Results of ~~Financial Information~~Operations

~~Basis~~We evaluate the performance of ~~presentation~~

~~The~~our operating business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below loss from operations are only included in our discussion of the consolidated financial statements for the periods reflect our financial position, results of operations, and cash flows. The financial statements have been prepared using the historical basis for the assets and liabilities and results of operations.

IDWP

(in thousands)							Change
Three months ended April 30,	2022			2021			$			%

Revenues	$	6,052		$	5,988		$	64			1.1	%
Direct cost of revenues		3,150			3,333			(183	)		(5.5	)%
Selling, general and administrative		3,079			3,114			(35	)		(1.1	)%
Depreciation and amortization		90			50			40			80.0	%
(Loss) income from operations	$	(267	)	$	(509	)	$	242			47.5	%

(in thousands)						Change
Six months ended April 30,	2022		2021			$		%

Revenues	$	13,583	$	11,636		$	1,947		16.7	%
Direct cost of revenues		6,864		6,506			358		5.5	%
Selling, general and administrative		6,312		5,914			398		6.7	%
Depreciation and amortization		161		99			62		62.6	%
Income (loss) from operations	$	246	$	(883	)	$	1,129		127.9	%

Revenues. Revenues increased by $64,000 in the three months ended April 30, 2022, compared to the three months ended April 30, 2021, primarily due to an increase in direct-to-consumer revenue of $384,000 related to Sonic the Hedgehog 30^th Anniversary, a decrease in sales returns and discounts on book sales of $210,000, and an increase in non-direct market publishing revenue of $108,000 driven by strong They Called Us Enemy sales, partially offset by a decrease in direct market publishing revenue of $275,000 due to fewer titles being released during the period, a decrease in games revenue of $114,000, a decrease in digital revenue of $110,000 due to an overall decrease in sales across all platforms, and a decrease in other revenue categories of $139,000.

Revenues increased by $1,947,000 in the six months ended April 30, 2022, compared to the six months ended April 30, 2021, primarily due to an increase in games revenue of $2,004,000 driven by the fulfillment of the direct-to-consumer games campaign for Batman Adventures, an increase in other publishing revenue of $462,000, a decrease in sales returns and discounts on book sales of $300,000, and an increase in non-direct market publishing revenue of 294,000, partially offset by a decrease in direct market publishing revenue of $796,000 due to fewer titles being released during the period, a decrease in digital sales of $285,000, and a decrease in licensing revenue of $32,000. Sales returns continue to improve compared to prior year due to targeted incentives with accounts to reduce return rates, localization of inventory management at Barnes & Noble, and Covid-related pressures in fiscal 2021. Digital sales are expected to remain below prior year as Covid-related restrictions end and people spend less time-consuming digital media. Direct market sales will likely remain lower for the year compared to prior year due to the release of multiple Teenage Mutant Ninja Turtles: The Last Ronin titles in fiscal 2021.

Effective March 2023, our licenses for the Transformers and GI Joe titles will be terminated. While the cancellation of the licenses for Transformers and GI Joe are anticipated to decrease revenues by approximately $1.2 million in fiscal year 2023, IDWP plans to mitigate the loss of revenue by enhancing its other key licensed brands. Additionally, we expect revenues from IDW Originals to begin to materialize in July 2022 with an estimated five new IDW original titles spanning fiscal 2022 and a planned output of doubling quantities each progressing fiscal year. We expect those efforts to offset any material impact on our gross margin from the loss of the licensed titles.

During calendar 2021, we began to winddown IDW Games and, going forward, IDW Games is only backfilling already developed games. The decision to shut down games was due to its lack of profitability, despite outliers like Batman Adventures, noted above.

Direct cost of revenues. IDWP’s direct cost of revenues decreased by $183,000 in the three months ended April 30, 2022, compared to the three months ended April 30, 2021, primarily due to a decrease in printing expenses and creative costs for IDW Games of $219,000 and a net decrease in other direct costs such as costs of artists and writers of $83,000, offset by an increase in publishing printing costs of $119,000. IDWP’s direct cost of revenues increased by $358,000 in the six months ended April 30, 2022, compared to the six months ended April 30, 2021, primarily due to an increase in printing expenses and creative costs for IDW Games of $564,000 and an increase in publishing printing costs of $287,000, offset by a decrease in royalty expenses of $239,000, a decrease in publishing creative costs of $173,000, and a decrease in digital and licensing costs of $81,000. Although costs were recognized for fulfillment of the Batman Adventures game in the current year, future games costs will only be recognized with individual customer orders. Royalty expense as a percentage of sales is dependent on product and title mix as different revenue streams and titles have different royalty rates.

Gross Margin. IDWP’s gross margin for the three months ended April 30, 2022 increased to 48.0% from 44.3% in the three months ended April 30, 2021. Gross margin for the six months ended April 30, 2022 increased to 49.5% from 44.1% in the six months ended April 30, 2021. These increases are principally due to the recognition of revenue for the fulfillment of the direct-to-consumer games campaign for Batman Adventures and a decrease in royalty expenses as a percentage of revenue.

Selling, General and Administrative. IDWP’s selling, general and administrative expenses decreased by $35,000 during the three months ended April 30, 2022, compared to the three months ended April 30, 2021. The decrease was driven by decreases in salary and benefits of $190,000 and overhead allocation of $70,000, partially offset by increases in consulting of $74,000, software costs of $133,000, and other net changes of $18,000. Consulting expenses of $70,000 were recorded as administrative expense in the three months ended April 30, 2022. These expenses were recorded as salary and benefits in the three months ended April 30, 2021. Additionally, a refund receivable for workers compensation insurance of $79,000 was recorded in salary and benefits in the three months ended April 30, 2022. Administration costs in the current fiscal year include costs related to the recently launched website of $122,000.

IDWP’s selling, general and administrative expenses increased by $398,000 during the six months ended April 30, 2022, compared to the six months ended April 30, 2021. The increase was driven by increases in consulting of $156,000, software costs of $142,000, severance of $40,000, and shipping and direct-to-consumer costs of $241,000, offset by decreases in salary and benefits of $174,000, and other net changes of $7,000. Expense categories include the various changes and differences described above. The overall increase from prior fiscal year relates to Batman Adventures fulfillment costs and costs related to the recently launched website.

As a percentage of IDWP’s revenues, selling, general and administrative expenses in the three months ended April 30, 2022, were 50.9% compared to 52.0% in the three months ended April 30, 2021, and 46.5% in the six months ended April 30, 2022, compared to 50.8% in the six months ended April 30, 2021.

IDWE

(in thousands)						Change
Three months ended April 30,	2022			2021		$			%

Revenues	$	1		$	4,152	$	(4,151	)		(100	)%
Direct cost of revenues		447			1,393		(946	)		(67.9	)%
Selling, general and administrative		1,222			1,534		(312	)		(20.3	)%
Depreciation and amortization		8			9		(1	)		nm
(Loss) income from operations	$	(1,676	)	$	1,216	$	(2,892	)		(237.8	)%

(in thousands)						Change
Six months ended April 30,	2022		2021			$			%

Revenues	$	4,319	$	6,916		$	(2,597	)		(37.6	)%
Direct cost of revenues		1,523		7,453			(5,930	)		(79.6	)%
Selling, general and administrative		2,484		2,781			(297	)		(10.7	)%
Depreciation and amortization		18		18			-			-
(Loss) income from operations	$	294	$	(3,336	)	$	3,630			108.8	%

nm—not meaningful

Revenues. IDWE revenues for the three months ended April 30, 2022, decreased by $4,151,000 compared to the three months ended April 30, 2021. The revenues for the three months ended April 30, 2021, includes revenue from delivered episodes of Wynonna Earp of $820,000 and tax credits for V Wars and October Faction of $3,331,000.

IDWE revenues for the six months ended April 30, 2022, decreased by $2,597,000 compared to the six months ended April 30, 2021. Revenues in the six months ended April 30, 2022, included revenue recognized due to the full delivery of Locke & Key season two in an amount of $4,200,000 and the French-Canadian license received for V Wars of $119,000. In the six months ended April 30, 2021, revenues included recognition from delivered episodes from Wynonna Earp of $3,433,000, tax credits for V Wars and October Faction of $3,331,000, foreign receipts from Dirk Gently of $114,000 and other income of $38,000.

Direct costs of revenues. Direct cost of revenues consists primarily of the amortization of production costs that were capitalized during the production of the television episodes and direct costs related to revenue recognized during related periods.

Direct costs of revenues for the three months ended April 30, 2022, decreased by $946,000 compared to the three months ended April 30, 2021. The amortized television costs for the three months ended April 30, 2022, consisted of inventory write offs of $155,000 and residuals of $292,000. The amortized television costs for the three months ended April 30, 2021, included delivered episodes of Wynonna Earp of $970,000 and cost refinements from October Faction and V Wars of $423,000.

Direct costs of revenues for the six months ended April 30, 2022, decreased by $5,930,000 compared to the six months ended April 30, 2021. The amortized television costs for the six months ended April 30, 2022, consisted of delivered episodes from Locke & Key season 2 of $999,000, cost refinement from October Faction and V Wars of $77,000, inventory write offs of $155,000, and residuals of $292,000. The amortized television costs for the six months ended April 30, 2021, included delivered episodes of Wynonna Earp of $4,918,000, impairment charges of $2,064,000, and cost refinements from October Faction and V Wars of $471,000

IDWE’s gross margin for the three months ended April 30, 2022, was 0.0% compared to 66.4% for the three months ended April 30, 2021. IDWE’s gross margin for the six months ended April 30, 2022, was 64.7% compared to negative 7.8% for the six months ended April 30, 2021. These gross margin figures are aligned with the explanations provided for revenues and direct costs of revenues.

Selling, General and Administrative. Selling, general and administrative expenses decreased by $312,000 during the three months ended April 30, 2022, compared to the three months ended April 30, 2021. The decrease was driven by decreases in consulting costs of $217,000, legal fees of $104,000, professional services of $73,000, marketing of $56,000, recruitment fees of $24,000, and other net changes of $22,000, offset by increases in overhead allocations of $125,000 and non-cash compensation of $59,000.

Selling, general and administrative expenses decreased by $297,000 during the six months ended April 30, 2022, compared to the six months ended April 30, 2021. The decrease was driven by decreases in consulting costs of $280,000, legal fees of $186,000, marketing of $108,000, salary and benefits of $21,000, recruitment fees of $90,000, professional services of $73,000 and other net changes of $13,000, offset by increases in overhead allocation of $381,000, and non-cash compensation of $93,000.

As a percentage of IDWE’s revenues, selling, general and administrative expenses in the six months ended April 30, 2022, was 100.0% compared to 52.0% in the three months ended April 30, 2021, and 57.5% in the six months ended April 30, 2022 compared to 40.2% in the six months ended April 30, 2021.

IDWMH

(in thousands)							Change
Three months ended April 30,	2022			2021			$			%

Selling, general and administrative	$	299		$	273		$	26			9.5	%
Depreciation and amortization		2			1			1			nm
Loss from operations	$	(301	)	$	(274	)	$	(27	)		9.9	%

(in thousands)							Change
Six months ended April 30,	2022			2021			$		%

Selling, general and administrative	$	795		$	465		$	330		71.0	%
Depreciation and amortization		5			3			2		nm
Loss from operations	$	(800	)	$	(468	)	$	332		70.9	%

nm—not meaningful

Selling, General and Administrative. Selling, general and administrative expenses increased by $26,000 during the three months ended April 30, 2022, compared to the three months ended April 30, 2021. The increase was driven by increases in salary and benefits of $61,000 and shareholder relations of $35,000, offset by decreases in accounting fees of $35,000 and legal fees of $35,000.

Selling, general and administrative expenses increased by $330,000 during the six months ended April 30, 2022, compared to the six months ended April 30, 2021. The increase was driven by increases in salary and benefits of $278,000, shareholder relations of $63,000, non-cash compensation of $19,000, and other net changes of $10,000, offset by decreases in legal fees of $40,000.

Net (loss) income IDW Media Holdings, Inc.

Consolidated

(in thousands)							Change
Three months ended April 30,	2022			2021			$			%
(Loss) income from continuing operations	$	(2,244	)	$	433		$	(2,677	)		(618.2	)%
Interest income, net		-			156			(156	)		(100	)%
Other expenses, net		(9	)		(12	)		3			nm
Net (loss) income from continuing operations		(2,253	)		577			(2,830	)		(490.5	)%
Loss from discontinued operations, net		-			(159	)		159			100.0	%
Gain on sale of discontinued operations		-			2,123			(2,123	)		(100.0	)%
Net (loss) income	$	(2,253	)	$	2,541		$	(4,794	)		(188.7	)%

(in thousands)							Change
Six months ended April 30,	2022			2021			$			%
Loss from continuing operations	$	(260	)	$	(4,687	)	$	4,427			94.5	%
Interest (expense) income, net		(10	)		142			(152	)		(107.0	)%
Other income (expense), net		6			(13	)		19			nm
Net loss from continuing operations		(264	)		(4,558	)		4,294			94.2	%
Loss from discontinued operations, net		-			(1,280	)		1,280			100.0	%
Gain on sale of discontinued operations		-			2,123			(2,123	)		(100.0	)%
Net loss	$	(264	)	$	(3,715	)	$	3,451			92.9	%

nm—not meaningful

(Loss) income from operations. Loss from operations increased by $2,677,000 in the three months ended April 30, 2022, compared to a income from operations in the three months ended April 30, 2021, due to increased operating losses from IDWE of $2,892,000 and an increase in corporate overhead of $28,000, offset by decreased operating losses from IDWP of $243,000. These changes are more fully described in the separate segment analyses above.

Loss from operations decreased by $4,427,000 in the six months ended April 30, 2022, compared to a loss from operations in the six months ended April 30, 2021, due to increased operating income from IDWP of $1,129,000 and from IDWE of $3,630,000 offset by an increase in corporate overhead of $332,000. These changes are more fully described in the separate segment analyses above.

Interest income (expense), net. Interest income decreased by $156,000 in the three months ended April 30, 2022, compared to the three months ended April 30, 2021, and by $152,000 in the six months ended April 30, 2022, compared to the six months ended April 30, 2021 due to interest income from CRA tax credits received in the three and six months ended April 30, 2021.

Loss from discontinued operations, net. Loss from discontinued operations was $0 for the three and six months ended April 30, 2022, compared a loss of $159,000 for the three months ended April 30, 2021 and a loss of $1,280,000 for the six months ended April 30, 2021, respectively, due to the sale of CTM which resulted in CTM no longer being consolidated with the Company as of February 15, 2021.

Gain on sale of discontinued operations decreased by $2,132,000 in the three and six months ended April 30, 2022 compared to the three and six months ended April 30, 2021, as a result of the sale of CTM.

Liquidity and Capital Resources

General

At April 30, 2022, we had cash and cash equivalents of $13,681,000 and working capital (current assets in excess of current liabilities) of $18,949,000.

We anticipate that our expected cash inflows from operations during the next twelve months together with our working capital, including the balance of cash and cash equivalents held as of April 30, 2022, including proceeds from the offering closed on August 6, 2021, will be sufficient to sustain our operations for at least the next twelve months following the date of this report.

We satisfy our cash requirements primarily through cash provided by the Company’s operating and financing activities.

	Six months ended April 30,
(in thousands)	2022			2021
Cash flows used in:
Operating activities	$	(3,415	)	$	(2,301	)
Investing activities		(436	)		(974	)
Financing activities		-			(1,319	)
Effect of exchange rate changes on cash and cash equivalents		-			39
Net decrease in cash and cash equivalents	$	(3,851	)	$	(4,555	)

Operating Activities

Cash flows used in operating activities was $3,415,000 for the six months ended April 30, 2022, and $2,301,000 for the six months ended April 30, 2021. For the six months ended April 30, 2022, the net use of cash is primarily a result of a net loss for the period and unfavorable changes in production cost payable and deferred revenues offset by favorable changes in accounts receivable. For the six months ended April 30, 2021, the net use of cash was primarily a result of a net loss in the period, an unfavorable adjustment for the gain on sale of CTM, and by an unfavorable change in deferred revenue, partially offset by favorable changes in trade accounts receivable, television costs and trade accounts payable, accrued expenses, production costs payable and other current liabilities.

Investing Activities

Our capital expenditures were approximately $436,000 and $72,000 in the six months ended April 30, 2022, and 2021, respectively. The six months ended April 30, 2021 also included an unfavorable adjustment of $902,000 related to the disposal of CTM.

Financing Activities

During the six months ended April 30, 2021, IDW repaid bank loans in the amount of $2,540,000. In the six months ended April 30, 2021, IDW received PPP loans of $1,196,000. In addition, IDW issued common stock for $25,000 in the six months ended April 30, 2021.

Critical Accounting Policies

Our condensed consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles ~~generally accepted~~ in the United States. 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 policies include those related to the allowance for doubtful accounts, ~~intangible assets with indefinite useful lives,~~goodwill, valuation of long-lived assets including intangible assets with finite useful lives and ultimate revenues for television costs. 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. See Note 1 to the consolidated financial statements included in our 2021 Form 10-K.

Recent Accounting Pronouncements

For a description of recently issued accounting pronouncements, including the respective dates of adoption and expected effects on our results of operations and financial condition, see Note 1 to the condensed consolidated financial statements ~~in the Registration Statement for a complete discussion of our significant accounting policies.~~

~~Results of Operations~~

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.~~

~~Net income IDW Media Holdings, Inc.~~

~~Consolidated~~

(in thousands) (unaudited) Change
Three months ended April 30, 2021 2020 $ %
Income from continuing operations $ 433 $ 1,329 $ (896 ) (67.4 %)
Interest income (expense), net 156 (10 ) 166 (1,660.0 %)
Other expense, net (12 ) (35 ) 23 (65.7 %)
Provision for income taxes - - - nm
Net income from continuing operations 577 1,284 (707 ) (55.1 %)
Net loss from discontinued operations (159 ) (1,638 ) 1,479 (90.3 %)
Gain on sale of discontinued operations 2,123 - 2,123 nm
Net income (loss) $ 2,541 $ (354 ) $ 2,895 (817.8 %)

(in thousands) (unaudited) Change
Six months ended April 30, 2021 2020 $ %
Loss from continuing operations $ (4,687 ) $ (4,454 ) $ (233 ) 5.2 %
Interest income (expense), net 142 (20 ) 162 (810.0 %)
Other expense, net (13 ) (61 ) 48 (78.7 %)
Provision for income taxes - - - nm
Net loss from continuing operations (4,558 ) (4,535 ) (23 ) 0.5 %
Net loss from discontinued operations (1,280 ) (2,692 ) 1,412 (52.5 %)
Gain on sale of discontinued operations 2,123 - 2,123 nm
Net loss $ (3,715 ) $ (7,227 ) $ 3,512 (48.6 %)

~~nm—~~~~not meaningful~~

this Quarterly Report on Form 10-Q.

~~Income from operations.~~ Income from operations decreased by ($896,000) for the three months ended April 30, 2021 compared to the three months ended April 30, 2020 due to a decrease in operating income from IDWE of ($945,000) and an increase in corporate overhead of ($87,000), partically offset by an increases in operating income at IDWP of $136,000. These changes are more fully described in the separate segment analyses below.

Loss from operations increased by ($233,000) for the six months ended April 30, 2021 compared to the six months ended April 30, 2020 due to an increase in operating losses from IDWP of ($329,000) offset by a decrease in losses at IDWE of $54,000 and a decrease in corporate overhead of $42,000. These changes are more fully described in the separate segment analyses below.

~~Interest income (expense), net~~ increased for the three months and six months ended April 30,2021 compared to the three and six months ended April 30, 2020 by $166,000 and $162,000, respectively, due to the interest income from the CRA tax credits.

~~Net loss from discontinued operations.~~ Net loss from discontinued operations decreased by $1,479,000 for the three months ended April 30, 2021 compared to the three months ended April 30, 2020 due to the sale of CTM which resulted in our not consolidating their financials into the Company as of February 15, 2021.

Net loss from discontinued operations decreased by $1,412,000 for the six months ended April 30, 2021 compared to the six months ended April 30, 2020 due to the sale of CTM which resulted in our not consolidating their financials into the Company as of February 15, 2021.

~~Gain on sale of discontinued operations~~ ~~increased by $2,132,000 for the three and six months ended April 30, 2021 compared to April 30, 2020 as a result of the sale of CTM.~~

~~IDWP~~

(in thousands) (unaudited) Change
Three months ended April 30, 2021 2020 $ %
Revenues $ 5,988 $ 4,681 $ 1,307 27.9 %
Direct cost of revenues 3,335 2,505 830 33.1 %
Selling, general and administrative 3,102 2,770 332 12.0 %
Depreciation and amortization 50 52 (2 ) (3.8 %)
Bad debt expense 11 - 11 nm
Income (loss) from operations $ (510 ) $ (646 ) $ 136 (21.1 %)

(in thousands) (unaudited) Change
Six months ended April 30, 2021 2020 $ %
Revenues $ 11,636 $ 10,981 $ 655 6.0 %
Direct cost of revenues 6,506 6,033 473 7.8 %
Selling, general and administrative 5,903 5,391 512 9.5 %
Depreciation and amortization 99 111 (12 ) (10.8 %)
Bad debt expense 11 - 11 nm
Income (loss) from operations $ (883 ) $ (554 ) $ (329 ) 59.4 %

~~nm—~~~~not meaningful~~

Included in IDWP’s segment from June 1, 2019 through March 31, 2020 is Clover Press. As of April 1, 2020, Clover Press is no longer a consolidated entity and became a cost method investment. Therefore all the Clover Press changes noted below are a result of a nil balance in April 30, 2021.

~~Revenues~~. Revenues increased by $1,307,000 in the three months ended April 30, 2021, compared to the three months ended April 30, 2020. IDWP revenue increased $1,425,000 driven by several high-performing direct market titles and increased direct-to-consumer sales, and due to the temporary halt of direct sales in 2020. Games revenue increased $106,000 due to fulfillment of a direct-to-consumer ~~Galaxy Hunters~~ games campaign. Digital sales decreased ($219,000) largely related to increased revenues from several new platforms in 2020. Licensing and royalty revenues increased $111,000 due primarily to an increase in foreign license revenue. This cumulative increase was offset by an overall increase in sales returns and discounts of ($58,000). Additionally, Clover Press revenues decreased by ($58,000) as they are no longer consolidated in the three months ended April 30, 2021.

Revenues increased by $655,000 in the six months ended April 30, 2021, compared to the six months ended April 30, 2020. Publishing revenue increased $1,348,000 driven by several high-performing direct market titles and increased direct-to-consumer sales and due to temporary halt of direct sales in 2020, offset by a decrease in book market sales. Games revenue decreased in the six months ended April 30, 2021 by ($760,000) due to fulfillment of a ~~TMNT: Adventure Game~~ direct-to-consumer games campaign in the six months ended April 30, 2020. Digital sales increased $62,000 due to continued strong sales across all platforms, licensing and royalty revenues increased $80,000 driven by increased foreign license revenue, and sales returns and discounts decreased by $56,000. Additionally, Clover Press revenues decreased by ($131,000) as they are no longer consolidated in the six months ended April 30, 2021.

~~Direct cost of revenues.~~ IDWP direct cost of revenues increased by $830,000 in the three months ended April 30, 2021 compared to the three months ended April 30, 2020. Direct cost of revenues increased by $473,000 in the six months ended April 30, 2021, compared to the six months ended April 30, 2020. IDWP direct cost of revenues consists primarily of printing expenses, costs of artists and writers, and royalties. Additionally, as of April 30, 2021 IDWP performed a full review of game development costs. As a result, it was determined that capitalized creative costs, advanced royalties, and vendor deposits of $231,000 related to games that would no longer be manufactured, and these amounts were expensed. This adjustment is a one-time write-down and will not have impact on financial statements in future periods. Additionally, Clover Press direct cost of revenues decreased by ($26,000) in the three months ended April 30, 2021and by ($55,000) in the three and six month periods ended April 30, 2021 compared to the corresponding periods in 2020, as they are no longer consolidated in the three and six months ended April 30, 2021. A portion of inventory was donated by the owners for the start-up of the Company.

IDWP’s gross margin for the three months ended April 30, 2021 decreased to 44.3% from 46.5% for the three months ended April 30, 2020. Gross margin for the six months ended April 30, 2021 decreased to 44.1% from 45.1% for the six months ended April 30, 2020.

~~Selling, General and Administrative.~~ IDWP selling, general and administrative expenses increased by $332,000 in the three months ended April 30, 2021 compared to the three months ended April 30, 2020 primarily due to increases in salaries and benefits of $365,000, overhead allocations of $252,000, repairs and maintenance of $44,000 and other net changes of $6,000. These were offset by decreases in marketing expenses of ($193,000) and occupancy and related expenses of ($45,000). Additionally, Clover Press consolidated selling, general, and administrative decreased by ($97,000) as they are no longer consolidated in the three months ended April 30, 2021.

IDWP selling, general and administrative expenses increased by $512,000 in the six months ended April 30, 2021 compared to the six months ended April 30, 2020 primarily due to increases in salaries and benefits of $633,000, overhead allocations of $464,000, repairs and maintenance of $55,000, and employee recruitment of $33,000. These were offset by decreases in marketing expenses of ($199,000), occupancy and related expenses of ($91,000), selling & distribution expenses of ($42,000), and other net changes of ($25,000). Additionally, Clover Press consolidated selling, general, and administrative decreased by ($316,000) as they are no longer consolidated in the six months ended April 30, 2021.

As a percentage of IDWP’s revenues, selling, general and administrative expenses in the three months ended April 30, 2021 were 59.05% compared to 50.51% in the three months ended April 30, 2020, and 62.72% in the six months ended April 30, 2021 compared to 56.01% in the six months ended April 30, 2020.

~~IDWE~~

(in thousands) (unaudited) Change
Three months ended April 30, 2021 2020 $ %
Revenues $ 4,152 $ 4,587 $ (435 ) (9.5 %)
Direct cost of revenues 1,394 790 604 76.5 %
Selling, general and administrative 1,533 1,627 (94 ) (5.8 %)
Depreciation and amortization 9 9 - 0.0 %
Income from operations $ 1,216 $ 2,161 $ (945 ) (43.7 %)

(in thousands) (unaudited) Change
Six months ended April 30, 2021 2020 $ %
Revenues $ 6,916 $ 8,624 $ (1,708 ) (19.8 %)
Direct cost of revenues 7,453 8,878 (1,425 ) (16.1 %)
Selling, general and administrative 2,781 3,119 (338 ) (10.8 %)
Depreciation and amortization 18 17 1 5.9 %
Loss from operations $ (3,336 ) $ (3,390 ) $ 54 (1.6 %)

~~nm—~~~~not meaningful~~

~~Revenues~~~~. For the three months ended April 30, 2021 revenues decreased by ($435,000) compared to the three months ended April 30, 2020. The revenues for the three months ended April 30, 2021 include;~~ ~~Wynonna Earp~~ ~~$674,000 and the completion of the CRA audit which established the final tax credit for~~ ~~V Wars~~ ~~and~~ ~~October Faction~~ ~~of $3,331,000. In the three months ended April 30, 2020, we recognized revenues on delivery of episodes of~~ ~~Locke & Key~~ ~~in the amount of ($4,000,000) and~~ ~~Dirk Gently~~ ~~in the amount of ($440,000).~~

~~For the six months ended April 30, 2021, revenues decreased by ($1,708,000) compared to the six months ended April 30, 2020. The revenues from the six months ended April 30, 2021 include;~~ ~~Wynonna Earp~~ ~~of $3,433,000 and the completion of the CRA audit which established the final tax credit for~~ ~~V Wars~~ ~~and~~ ~~October Faction~~ ~~of $3,331,000. In the six months ended April 30, 2020, we recognized revenues on delivery of episodes of~~ ~~October Faction~~ ~~in the amount of ($4,032,000),~~ ~~Locke & Key~~ ~~in the amount of ($4,000,000) and~~ ~~Dirk Gently~~ ~~in the amount of ($440,000).~~

~~Direct costs of revenues.~~ Direct cost of revenues consists primarily of the amortization of production costs that were capitalized during the production of the television episodes and direct costs related to revenue recognized during related periods.

~~Direct costs of revenues in the three months ended April 30, 2021 increased by $604,000 compared to the three months ended April 30, 2020. The increase is related to the amortization from episodes of~~ ~~Wynonna Earp~~ ~~Season 4 in the amount of $970,000 that were delivered in the three months ended April 30, 2021. In the three months ended April 30, 2020 the related amortization costs were from~~ ~~Locke & Key~~ ~~in the amount of ($1,333,000) and cost refinements from~~ ~~V Wars~~ ~~and~~ ~~October Faction~~ ~~in the amount of $971,000, and other costs of ($4,000).~~

Direct costs of revenues for the six months ended April 30, 2021 decreased by ($1,425,000) compared to the six months ended April 30, 2020. For the six months ended April 30, 2020 the amortization costs were from ~~Locke & Key~~ ~~in the amount of ($1,333,000), cost refinements from~~ ~~October Faction~~ ~~and~~ ~~V Wars~~ ~~in the amount of ($7,070,000) and other costs of ($4,000). Offset by the amortization for the six months ended April 30, 2021 from episodes of~~ ~~Wynonna Earp~~ ~~Season 4 in the amount of $4,918,000 and the impairment charges of $2,064,000.~~

IDWE’s gross margin for the three months ended April 30, 2021 was 66.4% compared to 82.8% for the three months ended April 30, 2020. Gross margin for the six months ended April 30, 2021 was (7.8%) compared to (2.9%) for the six months ended April 30, 2020. These gross margin figures are aligned with the rationale provided for revenues and direct costs of revenues.

~~Selling, General and Administrative~~. Selling, General and Administrative expenses decreased by ($94,000) during the three months ended April 30, 2021 compared to the three months ended April 30, 2020. The decrease was driven by decrease in marketing of ($123,000), travel and entertainment of ($13,000), promotional production materials ($292,000), offset by higher salary and benefits of $141,000, consulting fees of $57,000, legal fees of $40,000, accounting fees of $34,000, overhead allocations of $55,000, and other expenses of $7,000.

Selling, general and administrative expenses decreased by ($338,000) during the six months ended April 30, 2021 compared to the six months ended April 30, 2020. The decrease was driven by lower rent of ($27,000), marketing of ($275,000), travel and entertainment of ($55,000), promotional production materials ($446,000), offset by salary and benefits of $232,000, legal fees of $54,000, recruitment fees of $92,000, overhead allocations of $83,000 and other expenses of $4,000.

As a percentage of IDWE’s revenues, selling, general and administrative expenses in the three months ended April 30, 2021 were 40.95% compared to 49.49% in the three months ended April 30, 2020, and 37.28% in the six months ended April 30, 2021 compared to 43.992% in the six months ended April 30, 2020.

~~Liquidity and Capital Resources~~

~~General~~

We satisfy our cash requirements primarily through cash provided by the Company’s financing and operating activities. As more fully discussed below, additional sources of financing will be needed to finance the growth of IDWE.

Six months ended
April 30,
(in thousands) (unaudited) 2021 2020
Cash flows (used in) provided by:
Operating activities $ (2,301 ) $ 8,665
Investing activities (974 ) (414 )
Financing activities (1,319 ) (2,504 )
Effect of exchange rate changes on cash and cash equivalents 39 (45 )
Net (decrease) increase in cash and cash equivalents $ (4,555 ) $ 5,702

~~Operating Activities~~

Our cash flow from operations varies from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Cash flows were used in operating activities based on some these factors amounting to approximately ($2,301,000) and $8,665,000 for the six months ended April 30, 2021 and 2020, respectively.

~~Investing Activities~~

~~Our capital expenditures were approximately $72,000 and $299,000 in the six months ended April 30, 2021 and 2020, respectively.~~

~~Financing Activities~~

During the six months ended April 30, 2021 and 2020 we repaid repaid bank loans in the amounts of $2,540,000 and $13,732,000, respectively. In the six months ended April 30, 2021 and 2020 we received PPP loans of $1,195,680 and $1,195,679, respectively. In addition, we issued common stock for $25,000 and $783,000 in the six months ended April 30, 2021 and 2020, respectively.

Changes in Trade Accounts Receivables and Allowance for Doubtful Accounts

Trade accounts receivable decreased to approximately ~~$22,063,000~~$4,758,000 at April 30, ~~2021~~2022, compared to ~~$22,921,000~~$5,431,000 at October 31, ~~2020~~2021 principally due to changes in the accruals and collection of ~~IDW Entertainment~~IDWE revenue, as well as the timing of receipts of payments of other receivable balances. The allowance for doubtful accounts as a percentage of gross trade accounts receivable was ~~0.65%~~0% at April 30, ~~2021 compared to 0.13%~~2022 and at October 31, ~~2020,~~2021, reflecting ~~the decrease in receivable balances and~~ our collectible receivable experience.

Off- Balance Sheet Arrangements

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.

Other Sources and Uses of Resources

~~Where appropriate, we evaluate strategic investments~~On August 6, 2021, IDWMH closed a registered public offering of Class B common stock 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. 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.

The COVID-19 pandemic has had a negative financial impact on our business with regard to (a) significant losses of revenues and profits at CTM due to the significant decline of tourism in the United States and the closing of Broadway shows,(b) the temporary closure of IDW Publishing’s comic book distributor due to COVID-19 disruptions, and (c) production delays of IDWE’s television show Wynonna Earp. Its production schedule has been delayed which was a direct resultEF Hutton, as representative of the ~~COVID-19 pandemic that has affected virtually~~Underwriters exercised the ~~entire filmed entertainment industry. This production delay has negatively impacted the delivery, which in turn will push out our cash receipts.~~

In the fourth quarter of fiscal 2020 we paid “pull down” costs pursuant to a previously announced, multi-year agreement with Cineflix related to international sales of Wynonna Earp. Specifically, under this agreement, IDWE purchased the distribution rights to seasons one and two of Wynonna Earp from the current licensor (Netflix) and has agreed to transfer those rights to Cineflix. Cineflix will be the international distributor of all four seasons of Wynonna Earp. Due to changes in competitionoverallotment option included as well as the COVID-19 pandemic, the Cineflix deal is not expected to contribute as much as originally expected to IDW’s revenue and operating cash flow in fiscal years 2021 and 2022 as originally anticipated at the inceptionpart of the ~~deal~~offering in ~~2019.~~

~~We anticipate that our expected cash inflows from operations during~~full. The Company sold an aggregate of 2,875,000 shares of the ~~next twelve months together with our working capital, including the balance~~Company’s Class B common stock for gross consideration of ~~cash~~$10,350,000 less Underwriters commissions of $724,500 and ~~cash equivalents held as April 30, 2021 and proceeds from the private placement closed March 9, 2020, will be sufficient to sustain our next year~~Underwriters expenses of ~~operations. However, the~~$75,000.

The Company is ~~contemplating a capital raise in June 2021 as outlined in the Registration Statement.~~

~~The Company plans to use~~using the net proceeds we ~~receive~~received from the offering ~~for the following purposes: most heavily~~principally for the development of original IP and the purchase of associated publishing, media, and merchandise rights to be used across multiple platforms (e.g., print, television, new media) as well as supplemental IP acquisition and marketing spend for these newly created IP ~~franchises;~~franchises, and additionally for technology investment for our website, applications, data and business intelligence; talent investment as we look to expand our kids, middle grade, young adult, and family genres, and to further diversify into ~~animation; and~~animation. The Company also seeks to pursue potential acqui-hire and/or bolt-on mergers and acquisition opportunities, should such opportunities arise.

We do not have any agreements at this time to potentially acquire other entities or businesses. The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. However, the nature, amounts and timing of our actual expenditures may vary significantly depending on numerous factors. As a result, our management has and will retain broad discretion over the allocation of the net proceeds from this offering. We may find it necessary or advisable to use the net proceeds from this offering for other purposes, and we will have broad discretion in the application of net proceeds from this offering. To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

~~PPP Funds~~

~~On April 2, 2021, IDW Media Holdings, Inc. (the “Company”) received loan proceeds~~Where appropriate, we evaluate 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 ~~$1,195,680 (the “PPP Loan”) from Bank~~businesses in our portfolio and to achieve operational synergies. 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.

The COVID-19 pandemic has had a negative financial impact on our business with regard to (a) the temporary closure of ~~America, N.A.~~IDWP’s comic book distributor due to COVID-19 disruptions, and (b) production delays of IDWE’s television show Wynonna Earp. Its production schedule had been delayed which was a direct result of the COVID-19 pandemic that had affected virtually the entire filmed entertainment industry. This production delay had negatively impacted the delivery, which in turn pushed out our cash receipts.

In the fourth quarter of fiscal 2020 we paid “pull down” costs pursuant to a previously announced, multi-year agreement with Cineflix related to international sales of Wynonna Earp. Specifically, under this agreement, IDWE purchased the ~~Paycheck Protection Program (the “PPP”) under Division A, Title I~~distribution rights to seasons one and two of Wynonna Earp from the current licensor (Netflix) and had agreed to transfer those rights to Cineflix. Cineflix is now the international distributor of all four seasons of Wynonna Earp. Due to changes in competition as well as the COVID-19 pandemic, the Cineflix deal did not contribute revenue and operating cash flow in fiscal year 2021 at the levels originally anticipated at the inception of the CARES Act, as amended. The PPP Loan, which was in the form of a Note dated April 1, 2021 issued by the Company, matures on April 1, 2026 and bears interest at a rate of 1% per annum, payable monthly commencing on November 2, 2021. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on certain other debt obligations. The Company intends to use the entire PPP Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.deal.

On April 27, 2020, IDWMH. (inclusive of IDWP and IDWE) received loan proceeds of $1,195,679 from Bank of America, N.A. pursuant to the PPP under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The IDWMH PPP Loan, which was in the form of a Note dated April 15, 2020 issued by the Company, matures on April 15, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 24, 2020. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties, and under the terms of the loan, payments can be deferred for six months. Funds from the IDWMH PPP Loan may be used primarily for payroll costs and costs used to continue group health care benefits, and, up to a limited extent, on mortgage payments, rent, utilities, interest and other expenses as described in the CARES Act. Under the terms of the PPP, certain amounts of the IDWMH PPP Loans may be forgiven if they are used for those qualifying expenses. The Company used the entire IDWMH PPP Loan amount for those qualifying expenses.

~~IDWE~~

~~The two capital raises described assisted IDWE in achieving its long-term strategic plans.~~

The Company’s 2020 private placement of shares of Class B Common Stock at $6.00 per share, pursuant to which the Company issued 2,051,002 shares of Class B Common Stock for gross proceeds of approximately $12,300,000 inclusive of $4.0 million debt-to-equity conversion by the Company’s Chairman of the Board of Directors and former Chief Executive Officer, Howard S. Jonas to pay down the remaining down bridge loan.

Total proceeds of the issuance of Class B Common Stock in the amount of $23,605,000 from the Company’s 2019 three rounds of offerings, in connection with the Company’s private placements, provided a portion of the funding for IDWE’s operations, in addition to the Company’s other working capital needs. $8,000,000 was used to partially payback the bridge loan.

Dividends

In light of the current growth initiatives of the Company, particularly the television property development of IDWE, the Board of Directors determined to continue the suspension of the payment of cash dividends. Projects that have already been approved and commenced are placing demands on the Company’s resources, and management and the Board determined that it was in the best interests of the stockholders to utilize available cash resources for investment in these promising and exciting growth opportunities. This position may continue depending on the timing of projects, the cash generation of the Company’s operations and any financing that the Company may consummate. Decisions as to the payment of dividends in future periods will depend on the financial position, results of operations, prospects and current and projected competing demands for cash resources at the relevant time. The Company continues its position of prudent and conservative cash management and is committed to using all of its resources to maximize shareholder value, balancing short, medium and long-term interests.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

~~There have been no significant changes in our market risk exposures from those described in the Registration Statement.~~

~~Foreign Currency Risk~~

~~Beginning in 2018, IDWE is the obligor on Canadian loans.~~ There is a foreign currency exchange risk associated with IDWE’s arrangements with special-purpose entities, formed for the sole purpose of providing production services in Canada, as the value of ~~liabilities~~assets denominated in CAD will fluctuate due to changes in exchange rates, which will affect our production costs. ~~These loans mature on May 31, 2021. IDWE holds accounts receivables from Canadian tax credits and cash balances.~~

Foreign Exchange Balances Held
in CAD ( in thousands) April 30,
2021 October 31,
2020
Cash and cash equivalents $ 876 $ 937
Accounts receivable 20,021 16,355
Bank loans 14,329 18,917
Total $ 35,226 $ 36,209

Foreign Exchange Balances Held in CAD (in thousands)			April 30, 2022				October 31, 2021
Cash and cash equivalents		$	93			$	85

Item 4. ~~Controls~~Control and Procedures

Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our Chief Executive Officer (“CEO”)and Chief Financial Officer (“CFO”) have evaluated the effectiveness of our disclosure controls and procedures ~~(as defined in Rules 13a-15(e) and 15d-15(e)~~as of April 30, 2022 pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as ~~amended),~~amended (“Exchange Act”). Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our CEO and CFO, as ~~of the end of the period covered by this Quarterly Report on Form 10-Q.~~appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our ~~Chief Executive Officer~~CEO and ~~Chief Financial Officer~~CFO have concluded that, as of April 30, 2022 our disclosure controls and procedures were ~~effective as of April 30, 2021.~~effective.

Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended April 30, ~~2021~~2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~PART~~

Part II. OTHER INFORMATION

~~Item 1.~~

~~Legal Proceedings~~

Item 1. Legal Proceedings

None

~~Item 1A.~~

~~Risk Factors~~

Item 1A Risk Factors

There ~~are~~have been no material changes ~~from~~to the ~~risk factors included~~Risk Factors set forth in our ~~Registration Statement~~Annual Report on Form ~~S-1 filed on May 11, 2021.~~10-K for the fiscal year ended October 31, 2021, except for the following:

Item 1B. Unresolved Staff Comments.

None

~~Item 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds~~

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

None

~~Item 3.~~

~~Defaults upon Senior Securities~~

Item 3. Defaults upon Senior Securities

None

~~Item 4.~~

~~Mine Safety Disclosures~~

Item 4. Mine Safety Disclosures

~~None~~

Not applicable

~~Item 5.~~

~~Other Information~~

Item 5. Other Information

None

~~None~~

Item 6. Exhibits

Exhibit
Number

~~Item 6.~~

~~Exhibits~~

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

101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed or furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~Date: June 14, 2021~~

~~IDW Media Holdings, Inc.~~

	IDW Media Holdings, Inc.

Date: June 14, 2022	By:	/s/ Ezra Y. Rosensaft
	Name:	Ezra Y. Rosensaft
	Title:	Chief Executive Officer

Date: June 14, 2022	By:	/s/ ~~Karina M. Fedasz~~	Brooke T. Feinstein
	~~Karina M. Fedasz~~ Name:	Brooke T. Feinstein
	Title:	Chief Financial Officer

iso4217:USD xbrli:shares

(in thousands, except per share data)	April 30, 2021 (unaudited)			October 31, 2020 (Note 1)
Assets
Current assets:
Cash and cash equivalents	$	7,607		$	10,541
Trade accounts receivable, net		22,063			22,921
Inventory		3,667			3,754
Prepaid expenses		2,178			1,361
Current assets held for sale from discontinued operations		-			11,171
Total current assets		35,515			49,748
Property and equipment, net		364			410
Right-of-use assets, net		539			771
Non-current assets
Investments		-			25
Intangible assets, net		30			52
Goodwill		199			199
Television costs, net		1,270			2,926
Other assets		325			527
Total assets	$	38,242		$	54,658
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable	$	1,163		$	1,406
Accrued expenses		5,424			3,953
Deferred revenue		2,125			2,385
Bank loans payable – current portion		11,664			14,204
Government loans- current portion		1,320			793
Operating lease obligations – current portion		603			562
Other current liabilities		80			69
Current liabilities held for sale from discontinued operations		-			8,540
Total current liabilities		22,379			31,912
Non-current liabilities
Operating lease obligations – long term portion		59			368
Government loans – long term portion		1,071			403
Related party loans payable – long term portion		-			3,750
Total non-current liabilities		1,130			4,521
Total liabilities	$	23,509		$	36,433
Stockholders’ equity (see note 3):
Preferred stock, $.01 par value; authorized shares – 500; no shares issued at April 30, 2021 and October 31, 2020		-			-
Class B common stock, $0.01 par value; authorized shares – 12,000; 10,024 and 9,987 shares issued and 9,505 and 9,467 shares outstanding at April 30, 2021 and October 31, 2020, respectively		94			93
Class C common stock, $0.01 par value; authorized shares – 2,500; 545 shares issued and outstanding at April 30, 2021 and October 31, 2020		5			5
Additional paid-in capital		94,267			111,379
Accumulated other comprehensive loss		-			(60	)
Accumulated deficit		(78,437	)		(91,996	)
Treasury stock, at cost, consisting of 519 shares of Class B common stock at April 30, 2021 and October 31, 2020		(1,196	)		(1,196	)
Total stockholders’ equity		14,733			18,225
Total liabilities and stockholders’ equity	$	38,242		$	54,658

	Three Months Ended April 30,						Six Months Ended April 30,
(in thousands, except per share data)	2021			2020			2021			2020
Revenues	$	10,140		$	9,268		$	18,552		$	19,605

Costs and expenses:
Direct cost of revenues		4,726			3,295			13,959			14,912
Selling, general and administrative		4,910			4,583			9,149			9,019
Depreciation and amortization		60			61			120			128
Bad debt expense		11			-			11			-
Total costs and expenses		9,707			7,939			23,239			24,059
Income (loss) from operations		433			1,329			(4,687	)		(4,454	)

Interest income (expense), net		156			(10	)		142			(20	)
Other expense, net		(12	)		(35	)		(13	)		(61	)
Income (loss) before income taxes		577			1,284			(4,558	)		(4,535	)
Provision for income taxes		-			-			-			-
Net income (loss) from continuing operations		577			1,284			(4,558	)		(4,535	)

Loss from discontinued operations, net		(159	)		(1,638	)		(1,280	)		(2,692	)
Gain on sale of discontinued operations		2,123			-			2,123			-
Net income (loss)	$	2,541		$	(354	)	$	(3,715	)	$	(7,227	)

Basic and diluted income (loss) per share (note 2):
Continuing operations	$	0.27		$	0.15		$	(0.24	)	$	(0.56	)
Discontinued operations		(0.02	)		(0.19	)		(0.13	)		(0.33	)
Net income (loss)	$	0.25		$	(0.04	)	$	(0.37	)	$	(0.89	)

Weighted-average number of shares used in the calculation of basic and diluted income (loss) per share:		9,972			8,845			9,962			8,143

	Class B Common Stock				Class C Common Stock										Accumulated						Non-			Treasury Stock, at Cost
(in thousands)	Number of Shares		Amount		Number of Shares		Amount		Stock Subscriptions Receivable			Additional Paid In Capital			Other Comprehensive Loss			Retained Deficit			Controlling Interest (“NCI”)			Number of Shares		Amount			Total Shareholders’ Equity
Balance October 31, 2020		9,987		93		545		5		-			111,379			(60	)		(91,996	)		-			519		(1,196	)		18,225
Stock based compensation													82																	82
Issuance of common stock		37		1									24																	25
Issuance of stock options													77																	77
Comprehensive loss
Sale of discontinued operations													(17,295	)		21			17,274											-
Net Loss																			(3,715	)										(3,715	)
Other comprehensive income																39														39
Total comprehensive loss																60			(3,715	)		-								(3,655	)
Balance April 30, 2021		10,024		94		545		5		-			94,267			-			(78,437	)		-			519		(1,196	)		14,733

Balance October 31, 2019		7,419		74		545		5		(1,000	)		96,671			(60	)		(78,457	)		35			519		(1,196	)		16,072
Stock based compensation													520																	520
Issuance of common stock		2,151		15									12,242																	12,257
Subscriptions receivable										1,000			11																	1,011
Issuance of stock options													333																	333
NCI divestment in subsidiary																			259			(35	)							224
Comprehensive loss
Net Loss																			(7,227	)										(7,227	)
Other comprehensive income																(45	)													(45	)
Total comprehensive loss		-		-		-		-		-			-			(45	)		(7,227	)		-			-		-			(7,272	)
Balance April 30, 2020		9,570		89		545		5		-			109,777			(105	)		(85,425	)		-			519		(1,196	)		23,145

(in thousands)	April 30, 2021		October 31, 2020
Cash and cash equivalents	$	714	$	732
Accounts receivable		16,297		12,420
Bank loans		11,664		14,204
Total	$	28,675	$	27,356

(in thousands) (unaudited)	Publishing(a)			IDWE(b)		CTM			IDW Media Holdings			Total
							(discontinued operations)			(unallocated overhead)
Three months ended April 30, 2021
Revenues	$	5,988		$	4,152	$	-		$	-		$	10,140
(Loss) income from operations		(510	)		1,216		-			(273	)		433
Loss from discontinued operations, net		-			-		(159	)		-			(159	)
Net (loss) income		(508	)		1,382		(159	)		1,826	(c)		2,541
Total assets at April 30, 2021		12,886			21,194		-			4,162			38,242
Three months ended April 30, 2020
Revenues	$	4,681		$	4,587	$	-		$	-		$	9,268
(Loss) income from operations		(646	)		2,161		-			(186	)		1,329
Loss from discontinued operations, net		-			-		(1,638	)		-			(1,638	)
Net (loss) income		(647	)		2,161		(1,638	)		(230	)		(354	)
Total assets at April 30, 2020		12,540			36,178		12,463			11,712			72,893

(in thousands)
Beginning balance, October 31, 2020	$	2,385
Deferral of revenue		170
Recognition of deferred revenue		(420	)
Return of previously collected funds		(10	)
Ending balance, April 30, 2021	$	2,125

(in thousands)	March 31, 2020
Current assets
Cash and cash equivalents	$	215
Trade accounts receivable		1
Inventory		62
Other current assets		9
Noncurrent assets
Intangible assets, net		10
Right-of-use assets		226
Other noncurrent assets		64
Current liabilities
Trade accounts payable		(38	)
Operating lease obligation- current		(64	)
Related party notes payable		(50	)
Non-current liabilities
Operating lease obligations -long term		(169	)
Net assets deconsolidated	$	266

(in thousands)
Fair value of interest retained	$	25
Consideration received		100
Carrying amount of interest retained:
Net assets deconsolidated		(266	)
Noncontrolling interests		106
Loss on deconsolidation of subsidiary	$	(35	)

(in thousands)
The balance of cash and cash equivalents deconsolidated		$	(115	)

Results of discontinued operations	Three months ended April 30,						Six months ended, April 30,
(in thousands)	2021			2020			2021			2020
Revenue	$	207		$	2,287		$	1,427		$	6,095
Direct cost of revenue		105			1,236			946			2,927
Selling, general and administrative		227			1,955			1,649			4,803
Depreciation and amortization		45			293			295			564
Bad Debt		1			431			(109	)		482
Total costs and expenses		378			3,915			2,781			8,776
Loss from operations		(171	)		(1,628	)		(1,354	)		(2,681	)
Interest expense, net		19			(9	)		6			(18	)
Other (expense) income, net		(7	)		(1	)		68			7
Loss before income taxes		(159	)		(1,638	)		(1,280	)		(2,692	)
Provision for income taxes		-			-			-			-
Net loss	$	(159	)	$	(1,638	)	$	(1,280	)	$	(2,692	)