IDW Media Holdings Discloses Financial and Operational Developments

IDW Media Holdings (IDWM), an integrated media company with divisions IDW Entertainment (IDWE), IDW Publishing (IDWP), and CTM Media Group (CTM), announced today that due to broadened production costs and necessary operating costs, the company has entered into a term loan and a short-term bridge financing facility with its Chairman, Howard Jonas.

• On August 21, 2018, Jonas provided a $5M loan:
  • Loan principal and interest payable to Jonas from CTM’s free cash flow; the note matures August 2022;
  • The funds from this loan were used for corporate overhead and IDWE’s slate of current productions.
• On November 2, 2018, Jonas made available a $26M bridge loan facility:
  • As of December 18, 2018, IDWM had borrowed $23M;
  • IDWM is required to repay $11M no later than December 31, 2018, and the entire bridge loan matures on January 31, 2019, subject to the company’s right to extend for three months on enhanced terms;
  • The funds from this loan were used to support IDWE’s slate of current productions as well as development of additional properties.

Challenges that led to IDWM’s need for a cash infusion included:

• Specific projects at IDWE:
  • “October Faction”: Bank financing for this Netflix Original series being produced by IDWE was delayed. As well, the show is experiencing meaningful cost overages. Further, the project currently lacks additional revenue streams due to territory windowing;
  • “Wynonna Earp”: Based upon renewal options exercised by SyFy Network, IDWE has been self-financing production costs for seasons four and five (each 12 episodes) of this award-winning series. IDWE is seeking foreign sales to recoup its anticipated net investment; SyFy Network’s license fees for domestic rights only cover approximately half of IDWE’s costs;
  • “V-Wars”: This upcoming Netflix Original series, featuring Ian Somerhalder, may need additional post-production investment prior to delivery in early 2019;
  • “Locke & Key”: Based on Joe Hill’s Eisner-nominated book series, IDWE produced a pilot for $13.6 million in anticipation of licensing to Hulu. Subsequent to the pilot production, Hulu passed on greenlighting a season and IDW incurred non-reimbursable expenses associated with the pilot. Netflix has since acquired worldwide rights to season one and the show is expected to commence principal photography in early 2019.

Historically, IDWP and CTM contributed to IDWE to help support its growing slate. However, in the second half of 2018 flat performance at IDWP and CTM inhibited IDWE’s ability to draw upon sister divisions for all IDWE’s cash needs.

• Management: Recently, the company faced management changes with IDWE’s President, David Ozer, departing in August 2018, and IDWP’s President and Publisher, Greg Goldstein, stepping down this month. IDWP’s former Chief Creative Officer and Editor-In-Chief, Chris Ryall, returned to the company as President, Publisher and Chief Creative Officer in early December.

As the company continues to leverage its intellectual property (IP), IDWM faces the need for production investment, as well as additional infrastructure costs needed to manage operations for its growing slate of content and other operations. IDWM anticipates the need for further funding, and the company is planning to raise capital from existing stockholders by way of a private placement memorandum that will include the offering terms.

ABOUT IDW MEDIA HOLDINGS

IDW Media Holdings, Inc. (OTCQX: IDWM) is an integrated media company, which includes the award-winning IDW Publishing, IDW Games, IDW Entertainment, Top Shelf Productions, the San Diego Comic Art Gallery, and CTM Media Group Inc., one of North America's largest distributors of tourism information. Founded in 1999, IDW Media stands proudly at the forefront of visual entertainment, showcasing a formidable library of world-renowned licensed brands and creator-owned original IP. Its diverse array of comic books, graphic novels, and live-action television shows deliver enjoyment to fans of all ages.

ABOUT IDW PUBLISHING

IDW Publishing stands proudly at the forefront of printed visual entertainment, cultivating a formidable library of world-renowned licensed brands and creator-owned original IP. Its diverse array of comic books, graphic novels, and art books deliver reading enjoyment to fans of all ages. Its award-winning imprints The Library of American Comics, Yoe! Books, and Artist Editions preserve the valuable cultural history of the sequential art medium, while titles under the critically acclaimed Top Shelf and Black Crown banners celebrate fiercely independent voices. IDW Publishing is a division of IDW Media Holdings, Inc. (OTCQX: IDWM), a fully integrated media company with robust offerings in publishing, tabletop gaming, multimedia entertainment, and art exhibition via the San Diego Comic Art Gallery.

ABOUT IDW ENTERTAINMENT

IDW Entertainment “IDWE,” a franchise studio division of IDW Media Holdings, Inc. (OTCQX: IDWM), is charged with developing, financing, producing and distributing entertainment content ranging from series and features to interactive experiences and digital content from sister company IDW Publishing’s extensive IP catalog of comic books and graphic novels, as well as from third party content.

Since launching in 2013, IDWE has successfully delivered three seasons of the critically-acclaimed Wynonna Earp, which debuted on SYFY in the U.S.; Spike TV in the UK and Australia; and Netflix Globally, as well as two seasons of Dirk Gently, based on the best-selling comic novels by Douglas Adams and starring Sam Barnett and Elijah Wood, on BBC America in the U.S. and Netflix worldwide. The Company has also produced a pilot based on the popular comic book series Locke and Key from Joe Hill, with Carlton Cuse showrunning; Andy Muschietti directing; and starring Frances O’Connor, Danny Glover, Nate Corddry, Owen Teague, Jackson Robert Scott and Megan Charpentier. Additionally, IDWE is currently in various stages of development and production on a roster of scripted series, including the Netflix Original series V-WARS to premiere in 2019, starring Ian Somerhalder; and a supernatural thriller series based on Mike Carey and Arvind Ethan David’s hit comic miniseries Darkness Visible.

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