IDW MEDIA HOLDINGS, INC. The following information should be read in conjunction with the accompanying condensed consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the related notes thereto and our Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year endedOctober 31, 2021 , which was filed with theU.S. Securities and Exchange Commission ("SEC") onJanuary 20, 2022 (the "2021 Form 10-K"). As used below, unless the context otherwise requires, the terms "the Company," "we," "us," and "our" refer toIDW Media Holdings, Inc. , aDelaware 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 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 theSEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934. OVERVIEW
We were incorporated in the
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.
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through its imprints IDW,
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produces and distributes content based on IDWP's original IP for a variety of
formats including film and television.
Prior toFebruary 15, 2021 , we also ownedCTM 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 andCanada . OnFebruary 15, 2021 , we consummated the sale of CTM to an assignee ofHoward Jonas , the Company's Chairman in exchange for (i) the cancelation of$3.75 million of indebtedness we owed to 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 sale, and (iii) a contingent payment if CTM is sold within 36 months of the sale for more than$4.5 million . As ofJuly 31, 2020 , CTM was reported as a discontinued operation and CTM's operations have since been included in the financial statements as discontinued operations. COVID-19: Overview of Impacts IDWMH: Received two PPP loans related to core IDWE and IDWP operations.
o
o
? IDWP: Although COVID-19 caused changes in direct-market returnability in 2020,
effective in
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.
22
Business Description
IDW Publishing IDWP is an award-winning publisher of comic books, original graphic novels, and art books. Founded in 1999, IDWP has a long tradition of supporting original, powerful creator-driven titles. In 2002, IDWP published 30 Days of Night bySteve 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,Beau Smith's Wynonna Earp ,Alan Robert's The Beauty of Horror adult coloring books, andDarwyn Cooke's graphic novel adaptations ofRichard Stark's Parker novels are just a few of the hundreds of outstanding, award-winning titles published since its inception. In 2015, IDWP acquiredTop Shelf Productions , an award-winning 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 andWashington Post bestselling trilogy, March, by Congressman John Lewis,Andrew Aydin , andNate Powell . March is the only graphic novel to have won the National Book Award and is the second most taught graphic novel in schools. InJuly 2019 ,Top Shelf Productions releasedGeorge 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. Both titles are now perennial bestsellers and considered two of the finest non-fiction graphic novels ever made. Other iconicTop Shelf Productions titles includeKim Dwinell's Surfside Girls,Jeff Lemire's Essex Countyand The Underwater Welder, andHannah 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 Hasbro's Transformers, G.I. Joe, Dungeons & Dragons and My Little Pony; Sega's Sonic The Hedgehog; Paramount Global's, Star Trek; Teenage Mutant Ninja Turtles and Toho's Godzillas. These licensed titles bring with them diverse built-in audiences and build cache and retailer support for IDWP. With licensed franchises, 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), Rick & Morty vs. Dungeons & Dragons (withOni Press, Inc. ) and Godzilla vs. Power Rangers (withBoom 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 likeScott Snyder on "Dark Spaces: Wildfire,"Stephen Graham Jones on "Earthdivers," andG. 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 Artist's Editions, 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. Some of the standout Artist's Editions titles includeJim Lee's X-Men,Mike Mignola's Hellboy,David Mazzucchelli's Daredevil Born Again and Jim Sterako'sNick Fury Agent of SHIELD. Many of IDWP's titles are available worldwide through foreign licensing with 642 titles available in 62 territories in 24 languages. In 2020, IDW kicked off a major new initiative to release key titles as Spanish-language graphic novels in the North American market with the release of Spanish-language editions of They Called Us Enemy, Red Panda &Moon Bear , Locke & Key and 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"); (ii) to traditional retail outlets, including bookstores and mass market stores, on a returnable basis (the "non-direct market"); 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 webstore at idwpublishing.com. Through the direct market and non-direct market, IDWP, including its imprintTop Shelf Productions , sold over 4.8 million units in fiscal year 2021 and is regularly recognized as the fourth largest publisher in its category. Diamond served as IDWP's distributor to the direct market, worldwide, and beginningJune 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. 23 InSeptember 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 beginningJune 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 offered a mix of popular licensed titles such asDragon Ball Zand Batman the Animated Series, as well as creator developed strategic hobby games, such as Towers of Arkhanos and Tonari. IDW Games' products 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.
To expand its business 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. IDWP's revenues represented 100% and 59.1% of our consolidated revenues in the three months endedApril 30, 2022 and 2021, respectively and 75.9% and 62.7% in the six months endedApril 30, 2022 and 2021, respectively.IDW Entertainment IDWE is 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. IDWE was formed onSeptember 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 for the adult series/features marketplace as well as the kids, family and animation space. IDWE is in advanced conversations with various global studios, networks and 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 a number of series for television:
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related production shutdowns. The first six episodes of season four
premiered
Scrofano and is based on the IDWP comics of
twelve episodes are being produced by Seven24 Films and distributed by
IDWE, in partnership with Syfy and CTV Sci-Fi. Cineflix Studios is theco-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
thriller stars Ian Somerhalder and was produced by High Park
Entertainment . The series was based upon Jonathan Maberry's 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
was based on the IDWP comics of
starred Tamara Taylor and J.C.
MacKenzie. It was also produced by High Park Entertainment .
24
? Locke & Key premiered on Netflix on
critically-acclaimed graphic novels of Joe Hill and
published by IDWP. Season two aired in
TV charts in over 81 countries, and season three has been renewed by Netflix.
? IDWE recently wrapped production 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+ onAugust 19, 2022 . While in the past, IDWE focused solely on television development and financing production opportunities, a broadening of our strategic goals has evolved to 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 perception of IDWE, increase revenue opportunities for the publishing side of the business and develop a more robust entertainment footprint. IDWE's revenues represented 0% and 40.9% of our consolidated revenues in the three months endedApril 30, 2022 and 2021, respectively and 24.1% and 37.3% in the six months endedApril 30, 2022 and 2021, respectively.
CTM (Discontinued 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. Pursuant to a sales and purchase
agreement ("SPA") dated as of July 14, 2020 , we sold all of the stock of CTM to
an assignee of the Chairman in exchange for (i) the cancelation of $3.75 million
of indebtedness owed 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 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 consolidated statement of operations.
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 loss from operations are only included in our discussion of the
consolidated 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 %
25
Revenues. Revenues increased by$64,000 in the three months endedApril 30, 2022 , compared to the three months endedApril 30, 2021 , primarily due to an increase in direct-to-consumer revenue of$384,000 related to Sonic the Hedgehog 30th 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 endedApril 30, 2022 , compared to the six months endedApril 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. EffectiveMarch 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 inJuly 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 endedApril 30, 2022 , compared to the three months endedApril 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 endedApril 30, 2022 , compared to the six months endedApril 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 endedApril 30, 2022 increased to 48.0% from 44.3% in the three months endedApril 30, 2021 . Gross margin for the six months endedApril 30, 2022 increased to 49.5% from 44.1% in the six months endedApril 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 endedApril 30, 2022 , compared to the three months endedApril 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 endedApril 30, 2022 . These expenses were recorded as salary and benefits in the three months endedApril 30, 2021 . Additionally, a refund receivable for workers compensation insurance of$79,000 was recorded in salary and benefits in the three months endedApril 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 endedApril 30, 2022 , compared to the six months endedApril 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 endedApril 30, 2022 , were 50.9% compared to 52.0% in the three months endedApril 30, 2021 , and 46.5% in the six months endedApril 30, 2022 , compared to 50.8% in the six months endedApril 30, 2021 . 26 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 endedApril 30, 2022 , decreased by$4,151,000 compared to the three months endedApril 30, 2021 . The revenues for the three months endedApril 30, 2021 , includes revenue from delivered episodes ofWynonna Earp of$820,000 and tax credits for V Wars and October Faction
of$3,331,000 . IDWE revenues for the six months endedApril 30, 2022 , decreased by$2,597,000 compared to the six months endedApril 30, 2021 . Revenues in the six months endedApril 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 endedApril 30, 2021 , revenues included recognition from delivered episodes fromWynonna 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 endedApril 30, 2022 , decreased by$946,000 compared to the three months endedApril 30, 2021 . The amortized television costs for the three months endedApril 30, 2022 , consisted of inventory write offs of$155,000 and residuals of$292,000 . The amortized television costs for the three months endedApril 30, 2021 , included delivered episodes ofWynonna Earp of$970,000 and cost refinements from October Faction and V Wars of$423,000 .
Direct costs of revenues for the six months endedApril 30, 2022 , decreased by$5,930,000 compared to the six months endedApril 30, 2021 . The amortized television costs for the six months endedApril 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 endedApril 30, 2021 , included delivered episodes ofWynonna 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 endedApril 30, 2022 , was 0.0% compared to 66.4% for the three months endedApril 30, 2021 . IDWE's gross margin for the six months endedApril 30, 2022 , was 64.7% compared to negative 7.8% for the six months endedApril 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 endedApril 30, 2022 , compared to the three months endedApril 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 . 27 Selling, general and administrative expenses decreased by$297,000 during the six months endedApril 30, 2022 , compared to the six months endedApril 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 endedApril 30, 2022 , was 100.0% compared to 52.0% in the three months endedApril 30, 2021 , and 57.5% in the six months endedApril 30, 2022 compared to 40.2% in the six months endedApril 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 endedApril 30, 2022 , compared to the three months endedApril 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 endedApril 30, 2022 , compared to the six months endedApril 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
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 28
(Loss) income from operations. Loss from operations increased by$2,677,000 in the three months endedApril 30, 2022 , compared to a income from operations in the three months endedApril 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 endedApril 30, 2022 , compared to a loss from operations in the six months endedApril 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 endedApril 30, 2022 , compared to the three months endedApril 30, 2021 , and by$152,000 in the six months endedApril 30, 2022 , compared to the six months endedApril 30, 2021 due to interest income from CRA tax credits received in the three and six months endedApril 30, 2021 . Loss from discontinued operations, net. Loss from discontinued operations was$0 for the three and six months endedApril 30, 2022 , compared a loss of$159,000 for the three months endedApril 30, 2021 and a loss of$1,280,000 for the six months endedApril 30, 2021 , respectively, due to the sale of CTM which resulted in CTM no longer being consolidated with the Company as ofFebruary 15, 2021 . Gain on sale of discontinued operations decreased by$2,132,000 in the three and six months endedApril 30, 2022 compared to the three and six months endedApril 30, 2021 , as a result of the sale of CTM.
Liquidity and Capital Resources
General
At
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 ofApril 30, 2022 , including proceeds from the offering closed onAugust 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.
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